By Joe Wallace 

U.S. stock futures rose Friday, pointing to gains for major indexes at the end of a choppy week in which a jump in inflation rattled markets.

Futures for the S&P 500 rose 0.5%. An advance after the opening bell is still likely to leave the broad market gauge in the red for this week, its worst since the end of February. Contracts for the Dow Jones Industrial Average gained 0.4%. Futures on the technology-heavy Nasdaq-100 added 0.7%.

Stocks recouped some losses on Thursday after sliding in response to data showing consumer prices leapt in April, which added to evidence from commodity markets of building inflation. Investors worry that a surge in prices for raw materials will eat into profit margins. A burst of consumer-price inflation could also prompt the Federal Reserve to pare back easy-money policies that have buoyed stocks.

But several Fed officials have said this week the central bank has no intention to withdraw that support, helping to calm markets. The Fed needs to see several more months of data on jobs and inflation before determining when to begin tightening monetary policies, Gov. Christopher Waller said Thursday.

"The Fed has been very consistent," said Paul Donovan, chief economist at UBS Global Wealth Management. "That is telling you something: it is telling you [higher inflation] clearly is transitory."

Nonetheless Mr. Donovan expects markets to remain jumpy in response to higher inflation numbers in the coming months. "There will be volatility in the near term over this: not just volatility over inflation, but volatility over the central bank response to that."

Money managers will glean fresh insights into the pace of the economic recovery from data on retail sales, due at 8:30 a.m. ET. Economists expect consumer spending to have risen in April, albeit at a slower pace than in March, when stimulus checks boosted household incomes.

Data on industrial production, scheduled for 9:15 a.m., will give clues into the extent to which supply-chain bottlenecks have held back output at factories, mines and utilities. Production is forecast to have risen in April as factories looked to keep up with demand for autos, appliances and other goods.

In the bond market, the yield on 10-year Treasury notes ticked down to 1.654%, from 1.666% Thursday. Yields fall when bond prices rise.

Brent-crude futures, the benchmark in energy markets, were flat at $67.06 a barrel. Copper futures in New York, which hit a record on Tuesday, slipped 0.7% to $4.66 a pound.

A recent surge in commodity prices has sharpened focus among investors on companies that are likely to see profits pinched by higher input costs.

"There is more pricing pressure and that will be harder on certain companies," said Andrew Sheets, chief cross-asset strategist at Morgan Stanley. Consumer-discretionary stocks in the U.S. are most vulnerable, while banks and other financial firms are relative beneficiaries because they have minimal raw-material inputs, he added.

In overseas markets, the Stoxx Europe 600 edged up 0.4%.

Major Asian markets rallied by the close. Japan's Nikkei 225 gained 2.3%, China's Shanghai Composite Index rose 1.8% and Taiwan's Taiex added 1%.

Write to Joe Wallace at joe.wallace@wsj.com

(END) Dow Jones Newswires

May 14, 2021 05:01 ET (09:01 GMT)

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