U.S. stock futures fell on Friday with big selling returning to Wall Street after a one-day respite. The latest reading of the Federal Reserve’s favorite inflation gauge was due Friday morning. Futures tied to the Dow Jones Industrial Average lost 297 points, or about 0.6%. S&P 500 futures shed around 1.1%. Nasdaq 100 futures dropped 1.7% with tech shares in the premarket seeing the biggest declines. Shares of Tesla, a big winner of 2024 and in the post-election run, was off by 5% in premarket trading. Nvidia, the star of the bull market, fell 3%. Palantir and Dell shares were also lower. Also weighing on sentiment was the failure Thursday night of a Trump-endorsed House Republican measure to fund the government for three months and avert a government shutdown. Without a deal to fund the government and a bill that’s passed the House and Senate and has been signed into law, a partial shutdown is slated to start Friday night. During Thursday’s trading session, the Dow eked out a 15-point gain and ended a 10-day losing streak — its longest since 1974. The small gain came a day after the Dow plunged 1,100 points on Wednesday. The Dow is down 3.4% on the week, headed for its worst weekly performance since March 2023. The S&P 500 and Nasdaq are each off around 3% on the week. November’s reading of the personal consumption expenditures price index – the Federal Reserve’s preferred inflation metric – increased 2.4% year-over-year and 0.3% month-over-month, The core reading, which doesThe report takes on even more significance after Fed Chair Jerome Powell indicated this week that the Fed would cut interest rates fewer times next year in part because of stubborn inflation. The Fed’s outlook was the catalyst for the market’s plunge on Wednesday. Analysts polled by Dow Jones forecast the PCE price Index increased 0.2% on the month and 2.5% annually. Core inflation, which excludes food and energy, was expected to rise 0.2% on a monthly basis and 2.9% annually, above the Fed’s 2% target. “Whatever the reaction is going to be, it’s probably going to be more severe one way or the other than it would have been prior to seeing the Fed really increase those expectations,” Mike Dickson, head of research and quantitative strategies at Horizon Investments, told CNBC. The 10-year Treasury yield retreated on Friday as a key inflation gauge showed cooler-than-expected price pressures. The yield on the 10-year Treasury fell by 5 basis points to 4.51%, after topping 4.57% in the previous session. Meanwhile, the 2-year Treasury yield dipped6 basis points to 4.25%.The benchmark 10-year yield is still more than 0.1% higher than 4.40% where it ended last week. Asia-Pacific markets mostly fell on Friday as investors digest inflation data out of Japan, as well as an interest rate decision out of China. The People’s Bank of China held its loan prime rates steady on Friday, leaving the one-year rate unchanged at 3.1% and the five-year rate at 3.6%. Hong Kong’s Hang Seng index was flat in its final hour of trade, while mainland China’s CSI 300 dropped 0.45% to close at 3,927.74. Japan’s Nikkei 225 fell 0.29% after the inflation reading and closed at 38,701.9, while the broad-based Topix slipped 0.44% and finished at 2,701.99. South Korea’s Kospi was down 1.3% to end at 2,404.15, and the small cap Kosdaq lost 2.35% to 668.31, leading Asian losses. Australia’s S&P/ASX 200 fell 1.24% to close at 8,067, its lowest closing level since September. Oil prices fell on Friday on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down more than 3%. Brent crude futures fell by 72 cents, or 0.6%, to $72.45 a barrel. West Texas Intermediate crude futures also eased 69 cents, or 0.7%, to $68.91 per barrel. Gold prices gained on Friday as the dollar pulled back from highs ahead of U.S. Personal Consumption Expenditure data due later in the day, although the Federal Reserve’s hawkish interest rate outlook set bullion on track for a weekly loss. Spot gold was up 0.3% at $2,602.48 per ounce, and U.S. gold futures nudged 0.4% higher to $2,617.3. Bullion has fallen about 1.8% this week so far, after the U.S. central bank on Wednesday projected two 25-bps rate cuts by the end of 2025, which is half a percentage point less in policy easing than officials had expected in September.
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