Dow Jones Industrial Average futures rose 299 points, or 0.6%, early Friday as oil prices pulled back from this week's sharp rally. Traders now turn to August's consumer price index report, due hours before the Federal Reserve's Sept. 16 rate decision.
Futures linked to the Dow Jones Industrial Average climbed 299 points, or 0.6%, early Friday as crude oil retreated from this week's gains. S&P 500 futures rose 0.6%, along with Nasdaq-100 futures, as traders shifted focus to the incoming inflation data.
Oil retreats after a week of sharp gains
West Texas Intermediate futures dropped 3.3% to $99.08 a barrel, while Brent futures slid 3.6% to $103.76 a barrel, giving back some of the gains driven by escalating tensions in the Middle East. Both contracts remained on pace for weekly advances of around 8%, pressure that has weighed on U.S. equities. Week to date, the Dow is on pace for a 2.5% decline, while the S&P 500 and Nasdaq are each heading for a 1.6% loss.
Rates near multiyear highs as CPI looms
Rates have also risen sharply this week, as investors worry that higher energy prices will add upward pressure on inflation. The 10-year Treasury note yield topped 4.95% this week, a level not seen since October 2023. All eyes now turn to Friday's CPI reading for August; economists polled by Dow Jones expect a 0.4% monthly increase and an annual rate of 3.4%.
The report factors directly into the Fed's Sept. 16 decision, and fed funds futures currently price a roughly 71% likelihood of a rate hike, according to the CME Group's FedWatch tool.
According to Christopher Hodge, chief economist of the U.S. at Natixis CIB Americas, a reading in line with consensus would mark "the fourth consecutive month of encouraging inflation readings". He added that a hotter-than-expected print would likely prompt a hike at next week's meeting.
Source: CNBC
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