US stock futures were on track to end a lackluster trading week with a drop on Friday ahead of key inflation data and next week’s Federal Reserve interest rate decision.
Futures on the Dow Jones Industrial Average fell 90 points, or 0.3%, after the index gained 168 points to close at 33,833 on Thursday. Futures for the S&P 500 – which entered bull market territory on Thursday after a slow lull in the longest bear market since 1948 – slipped 0.2%, while contracts for the tech-heavy Nasdaq fell 0.1%.
There were few triggers for significant stock market action this week as investors await the Fed’s next interest rate decision after the central bank’s Monetary Policy Committee meets on June 13-14. Signs of a slowdown in the economy and easing inflation have raised expectations that there will be a pause rather than another rate hike. However, inflation data ahead of the Fed’s decision in the form of the Consumer Price Index (CPI) for May remains a key unknown.
“Markets may be a bit cautious given the busy central bank calendar next week,” said Neil Wilson, analyst at Broker Markets.com, noting upcoming decisions from the European Central Bank and Bank of Japan, as well as the Fed.
Meanwhile, concerns about global economic growth weighed on sentiment. The U.S. hasn’t escaped those worries either, with Thursday’s data showing 261,000 weekly jobless claims, beating expectations and rising to the highest since October 2021.
“Yesterday’s weak jobless claims dampened expectations of a Fed rate hike, which is being priced in today with a 25% chance,” said Peter Garnry, head of equity strategy at Saxo Bank.