US stock futures edge lower as rate outlook remains uncertain

Investing.com-- US stock futures fell marginally Friday, handing back some of the previous session's gains, as investors digested recent inflation data as well as quarterly corporate earnings.

By 06:35 ET (11:35 GMT), the Dow Jones Futures contract was down 50 points, or 0.1%, S&P 500 Futures traded 6 points, or 0.1%, lower, while Nasdaq 100 Futures traded largely unchanged.

Wall Street indexes rose on Thursday, with the S&P 500 rising 0.5% to a record closing high, while the NASDAQ Composite surged 0.9%, also to a record close. The Dow Jones Industrial Average lagged, rising only 0.1%.

The major averages recorded another positive month, with the Nasdaq the best performer in February, registering a 6.1% gain. The S&P 500 climbed 5.2%, while the DJIA added 2.2% for its first four-month winning streak since May 2021.

PCE price index data - the Federal Reserve’s preferred inflation gauge - eased slightly in January, as expected. The print spurred some bets that the Fed will begin cutting rates by June, which in turn sparked a rally on Wall Street.

But given that inflation remained well above the Fed’s 2% annual target, doubts remained over the timing of the central bank’s potential cuts. A slew of Fed officials reiterated their warnings over inflation remaining sticky, while the CME Fedwatch tool only showed a mild increase in bets on a June rate cut.

Global recovery in doubt

Additionally, doubts remain over the extent of the global recovery, after official data showed that China's manufacturing activity in February shrank for a fifth straight month, raising pressure on Beijing to roll out more stimulus measures as the parliament prepares for a key annual meeting next week.

China's official manufacturing purchasing managers' index, fell to 49.1 in February from 49.2 in January, once again below the 50-mark separating growth from contraction.

In Europe, the downturn in Germany's dominant manufacturing sector deepened in February, with the HCOB final Purchasing Managers' Index for German manufacturing falling to 42.5 in February from 45.5 in January, ending a six-month run of steady increases that nonetheless never surpassed the 50 level separating growth from contraction.

At the same time, inflation in the eurozone fell at a slower rate than expected in February, with the CPI release for the euro area coming in at 2.6% on an annual basis, below the prior month's 2.8%, but above the 2.5% expected.

Dell, Fisker in spotlight

Among stocks moving in premarket trading, tech infrastructure firm Dell Technologies (NYSE:DELL) surged 23% on stronger-than-expected earnings and guidance as solid demand for its artificial intelligence-optimized servers offset weakness in personal computing..

NetApp (NASDAQ:NTAP) soared 17% on a strong outlook for 2024.

On the other hand, electric vehicle maker Fisker (NYSE:FSR) plummeted 35% after it warned of a substantial doubt over its ability to stay afloat. The firm said it will cut its workforce by 15% and was in talks with a large automaker over a potential investment.

Crude rises on U.S. activity boost, OPEC+ hopes

Oil prices edged higher Friday, on course to post weekly gains after easing U.S. inflation played into expectations that the Federal Reserve could start cutting interest rates as early as June, potentially boosting economic activity in the world’s largest economy.

By 06:35 ET, the U.S. crude futures traded 1.6% higher at $79.53 a barrel, on track for at least a 3% increase this week, while the Brent contract climbed 1.6% to $83.22 a barrel, up just over 1% this week.

Increasing expectations that the Organization of Petroleum Exporting Countries and allies, known as OPEC+, will continue with its supply cuts beyond the first quarter, and potentially until the end of 2024, have also provided support for the crude market.

A decision on extending OPEC+ cuts is expected in next week.

Additionally, gold futures rose 0.5% to $2,065.25/oz, while EUR/USD traded 0.1% higher at 1.0818.

(Ambar Warrick contributed to this article.)

This article first appeared in Investing.com