Futures rise as Treasury yields take a breather; eyes on inflation data
By Ankika Biswas and Shashwat Chauhan
(Reuters) — U.S. stock index futures advanced on Friday as Treasury yields eased from multi-year highs and powered gains in growth stocks, while investors awaited a crucial inflation metric to assess the outlook for the Federal Reserve's monetary policy.
Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Tesla (NASDAQ:TSLA), Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) and Nvidia (NASDAQ:NVDA) advanced between 0.7% and 1.5% in premarket trading as two-year and 10-year Treasury yields declined.
«A move lower in bond yields has given equity markets a much-needed reprieve,» said Tim Waterer, chief market analyst at KCM Trade.
With fears of high oil prices fueling inflation, investors are awaiting the U.S. central bank's preferred inflation metric, the personal consumption expenditures (PCE) price index, which is seen increasing 0.5% in August against a 0.2% gain in July.
The core rate, which excludes the volatile food and energy components, is expected to have increased 0.2% in August, similar to July's reading.
«If the core PCE price index print produces any sort of surprise to the upside, then this reprieve for risk assets may be short lived. Any signs of core pressures rising would increase the odds of a November hike,» Waterer said.
Traders' bets on the benchmark rate remained unchanged in November and December at around 83% and 66%, respectively, according to CME's FedWatch tool.
Meanwhile, a 25-basis-point rate cut is being priced in as early as March, growing to around 36% in June and July.
U.S. consumer sentiment data for September is also due shortly after the opening bell.
At 7:03 a.m. ET, Dow e-minis were up 166 points, or 0.49%, S&P 500 e-minis were up 21.25 points, or
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