U.S. index futures slightly declined in pre-market trading on Friday, as investors await today’s quarterly results from major banks like JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC), and wholesale inflation data that could influence the likelihood of a rate cut. Market sentiment is cautious ahead of an uncertain weekend. China is expected to announce new fiscal stimulus on Saturday, while geopolitical tensions between Israel and Iran could impact oil prices.
At 05:50 AM, Dow Jones futures (DOWI:DJI) fell 61 points, or 0.14%. S&P 500 futures lost 0.17%, and Nasdaq-100 futures dropped 0.27%. The 10-year Treasury yield stood at 4.092%.
In commodities, oil prices fell but are still heading for a second consecutive weekly gain. Investors are assessing Hurricane Milton’s damage in the U.S. and potential Israeli retaliation against Iranian facilities. The market remains cautious with elevated stock levels and the Fed’s policy. Meanwhile, Libya’s National Oil Corporation (NOC) restored production to 1.22 million barrels per day after a central bank crisis.
West Texas Intermediate crude for November dropped 0.70% to $75.32 per barrel, while Brent for December fell 0.71% to $78.85 per barrel.
Gold prices (PM:XAUUSD) rose 0.18% to $2,637.80 an ounce, benefiting from economic uncertainties, geopolitical tensions, higher-than-expected inflation, and a slowdown in the U.S. labor market.
On today’s U.S. economic agenda, at 8:30 AM, the Producer Price Index (PPI) for September will be released, with expectations of 0.1%, and core PPI, previously at 0.3%. The prior annual PPI was 1.7%, and the annual core was 3.3%. At 9:45 AM, Chicago Fed President Austan Goolsbee will give opening remarks. Preliminary consumer sentiment for October will be announced at 10:00 AM, projected at 70.3. Dallas Fed President Lorie Logan’s speech at 10:45 AM and Fed Governor Michelle Bowman’s at 1:10 PM complete the schedule.
In the Asia-Pacific markets, China’s CSI 300 index plummeted 2.8% on Friday, marking a 3.3% loss for the week. Japan’s Nikkei 225 rose 0.57%, boosted by financial and healthcare sectors. In South Korea, the Kospi index fell slightly, while Australia’s S&P/ASX 200 lost 0.1%. Hong Kong’s Hang Seng remained closed due to a local holiday.
Chinese stocks dropped as investors reduced risk ahead of a Ministry of Finance briefing on potential fiscal stimulus. China’s Ministry of Finance is expected to announce a new fiscal stimulus package between $280 and $420 billion (2 to 3 trillion yuan) at a press conference on Saturday, 10:00 AM local time, while markets will be closed.
South Korea’s central bank cut interest rates by 0.25%, bringing them to 3.25%, marking the first cut since 2020. The decision aims to ease burdens on households facing high borrowing costs, as inflation in South Korea fell to 1.6% in September, the lowest level since early 2021 and below the central bank’s 2% average target. The bank’s governor indicated there is room for more cuts, but without specific guidance for the near future.
A Reuters poll suggests Japan’s consumer inflation likely slowed in September due to falling energy costs, while export growth significantly declined. The core consumer price index is expected to have risen 2.3% compared to the previous year, down from August’s 2.8%.
European markets show mixed performance, with sectors moving in opposite directions as investors analyze UK GDP data and await China’s anticipated fiscal stimulus.
UK GDP grew by 0.2% in August, as expected, following flat months earlier this year.
France plans to sell $328 billion (€300 billion) in government bonds in 2025 to fund its budget after months of political instability. This amount will help cover an estimated deficit of €136 billion, smaller than this year’s. The government aims to restore investor confidence amid growing fiscal concerns.
Among individual stocks, Bayer (TG:BAYN) shares dropped 2.1% after being ordered to pay $78 million to a Pennsylvania man who claimed to have developed cancer from using Roundup herbicide. The jury awarded $3 million in compensatory damages and $75 million in punitive damages. The company plans to appeal the decision.
Porsche (TG:PAH3) shares fell 0.6% after a 19% decline in sales in China during the third quarter, marking the worst performance in a decade, signaling rising competition from local electric vehicle manufacturers.
THG (LSE:THG) shares dropped over 5% as it plans to raise $123.4 million (£95.4 million) through a share issue at 49 pence each, representing a 5.2% discount. CEO Matthew Moulding will invest £10 million, with existing and retail investors also contributing. The fundraising will support the spinoff of the Ingenuity division and business model simplification.
ArcelorMittal (EU:MT) shares rose 0.2% after announcing it will buy Nippon Steel’s 50% stake in the Calvert joint venture to ease regulatory concerns over Nippon’s acquisition of US Steel. The company will pay $1, while Nippon Steel will inject around $900 million in capital and forgive loans.
Italian brake system manufacturer Brembo (BIT:BRE) shares jumped 3.7% after announcing the acquisition of Ohlins Racing, a suspension technology specialist, for $405 million, the company’s largest purchase to date.
On Thursday, Wall Street’s major indices posted slight declines: the Dow Jones and Nasdaq both slipped 0.1%, while the S&P 500 fell 0.2%. The weakness was driven by a U.S. inflation report that showed a larger-than-expected rise in consumer prices, dashing hopes for aggressive interest rate cuts by the Federal Reserve. CME’s FedWatch tool still suggests an 84% chance of a 25-basis-point rate cut next month.
The Consumer Price Index (CPI) rose 0.2% in September, matching August’s increase but exceeding the 0.1% expectation. Core CPI, excluding food and energy, increased 0.3%, above the expected 0.2%. Additionally, jobless claims rose to 258,000, surpassing the 230,000 forecast. As a result, Raphael Bostic, President of the Atlanta Federal Reserve, said he is “open” to the possibility of keeping rates unchanged in November.
In earnings reports, numbers are expected from JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC), BlackRock (NYSE:BLK), Bank of New York Mellon (NYSE:BK), Fastenal (NASDAQ:FAST), and Bank7 (NASDAQ:BSVN), before the opening bell.
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