Futures Pointing To Initial Weakness On Wall Street Following Key Data

(RTTNews) - The major U.S. index futures are currently pointing to initial weakness on Friday, with the stocks likely to see further downside after ending the previous session modestly lower.

The downward momentum on Wall Street comes amid a negative reaction to some key U.S. economic data, including the Federal Reserve's preferred readings on consumer price inflation.

A highly anticipated report released by the Commerce Department showed consumer prices in the U.S. increased by slightly more than expected in the month of December.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.4 percent in December after inching up by 0.2 percent in November. Economists had expected prices to rise by 0.3 percent.

The report also said the PCE price index in December was up by 2.9 percent compared to the same month a year ago, reflecting an uptick from 2.8 percent in November. The annual rate of growth was expected to remain unchanged.

Excluding food and energy prices, the core PCE price index still increased by 0.4 percent in December after rising by 0.2 percent in November. Core prices were expected to grow by 0.3 percent.

The annual rate of growth by the core PCE price index accelerated to 3.0 percent in December from 2.8 percent in November. Economists had the pace of growth to inch up to 2.9 percent.

Meanwhile, a separate report released by the Commerce Department showed economic growth in the U.S. slowed by much more than anticipated in the fourth quarter of 2025.

The report said gross domestic product climbed by 1.4 percent in the fourth quarter after surging by 4.4 percent in the third quarter. Economists had expected GDP to jump by 2.8 percent.

The Commerce Department noted increases in consumer spending and investment were partly offset by decreases in government spending and exports.

Stocks moved mostly lower during trading on Thursday, giving back ground after turning in a strong performance in the previous session. The major averages all moved to the downside, although selling pressure was somewhat subdued.

The major averages finished the day off their lows of the session but still in negative territory. The Dow slid 267.50 points or 0.5 percent to 49,395.16, the Nasdaq fell 70.91 points or 0.3 percent to 22,682.73 and the S&P 500 dipped 19.42 points or 0.3 percent to 6,861.89.

The weakness on Wall Street partly reflected a negative reaction to earnings news from Walmart (WMT), with the retail giant slumping by 1.4 percent.

While Walmart reported fourth quarter results that exceeded analyst estimates, the company provided weaker than expected earnings guidance for the current year.

Negative sentiment may also have been generated by a continued spike by the price of crude oil amid concerns about a military conflict between the U.S. and Iran.

However, traders seemed reluctant to make significant moves ahead of the release of closely watched readings on consumer price inflation on Friday. The data could have a significant impact on the outlook for interest rates.

The minutes of the Federal Reserve's latest monetary policy meeting noted a number of participants judged further rate cuts may not be warranted until there was clear indication that the progress of disinflation was firmly back on track.

Airline stocks showed a substantial move to the downside on the day, with the NYSE Arca Airline Index plummeting by 4.4 percent.

Significant weakness was also visible among housing stocks, as reflected by the 1.3 percent loss posted by the Philadelphia Housing Sector Index.

On the other hand, computer hardware stocks saw considerable strength, resulting in a 3.3 percent surge by the NYSE Arca Computer Hardware Index.

Oil service stocks also turned in a strong performance amid an extended surge by the price of crude oil amid concerns about a potential military conflict between the U.S. and Iran.

Commodity, Currency Markets

Crude oil futures are falling $0.25 to $66.18 a barrel after surging $1.24 to $66.43 a barrel on Thursday. Meanwhile, after slipping $12.10 to $4,997.40 ounce in the previous session, gold futures are jumping $49.80 to $5,047.20 an ounce.

On the currency front, the U.S. dollar is trading at 155.38 yen versus the 154.98 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1763 compared to yesterday's $1.1772.

Asia

Asian markets ended mostly lower on Friday, although the South Korean equity benchmark rose to a record high amid expectations that upcoming investor-friendly measures will boost shareholder returns and lift market valuations.

Regional sentiment was fragile amid escalating U.S.-Iran tensions, risks linked to massive investments in artificial intelligence and fresh concerns about the health of the U.S. private credit sector.

Gold edged above $5,000 an ounce in Asian trading but was set for a weekly decline as the dollar surged to a one-month high ahead of the release of U.S. GDP and PCE inflation data.

Oil rose to its highest level since August on rising geopolitical risks after U.S. President Donald Trump warned Tehran that it had a "maximum" of 15 days to reach a deal with the U.S. or "bad things will happen."

Mainland Chinese markets remained shut for the Lunar New Year holidays. Hong Kong's Hang Seng Index slumped 1.1 percent to 26,413.35 as traders retuned from the holiday break.

Japanese markets lost ground as U.S.-Iran tensions escalated and investors waited for key U.S. economic data that could shape expectations for Fed policy.

The yen weakened as data showed Japan's key inflation gauge eased to the slowest pace in two years, dampening bets on a Bank of Japan rate hike.

Separately, flash PMI data from S&P Global revealed that Japan's private sector activity expanded at the quickest pace since May 2023 in February.

The Nikkei 225 Index tumbled 1.1 percent to 56,825.70, while the broader Topix Index settled 1.1 percent lower at 3,808.48.

Sumitomo Pharma plummeted 15.6 percent despite securing conditional approval for its regenerative therapy. Mitsubishi Electric rallied 2.1 percent after the company announced significant organizational and management changes.

In Seoul, the Kospi surged 2.3 percent to 5,808.53, breaching the 5,800-point mark for the first time to hit a fresh record high led by chip and defense shares.

Australian markets finished marginally lower to snap a four-session winning run after touching a record on Thursday.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index fell 1.0 percent to 13,308.52.

Europe

European stocks have moved mostly higher on Friday and are set for weekly gains on the back of strong corporate earnings and easing AI concerns.

The upside remained capped amid simmering geopolitical tensions after U.S. President Donald Trump set a deadline of 10-15 days for Iran to agree nuclear deal or face "bad things." Iran warned U.S. bases in the Middle East could be "legitimate targets" if Washington attacks.

British Prime Minister Keir Starmer has reportedly blocked a request from Trump to allow U.S. forces to use U.K. air bases during any pre-emptive attack on Iran, saying it could break international law.

In economic news, U.K. retail sales growth accelerated the most since May 2024, partly due to higher artwork and antiques sales, data from the Office for National Statistics showed.

Retail sales posted monthly growth of 1.8 percent in January following a 0.4 percent rise in December. On a yearly basis, retail sales growth accelerated to 4.5 percent in January from 1.9 percent in December.

Elsewhere, a survey showed Eurozone business activity accelerated faster than forecast this month.

While the French CAC 40 Index is up by 0.7 percent, the U.K.'s FTSE 100 Index is up by 0.5 percent and the German DAX Index is up by 0.2 percent.

Italian luxury brand Moncler has soared after revenues rose 7 percent at constant exchange rates in the fourth quarter, driven by solid growth in Asia and the Americas.

French industrial gases group Air Liquide has also jumped. After posting an increase in full-year net profit, the company confirmed its 2026 margin guidance and announced a new operating margin target for 2027.

Reinsurance giant Swiss Re has also moved to the upside after it agreed to buy QBE Insurance Group's global trade credit and surety business.

Meanwhile, West Africa-focused oil and gas company Tullow Oil has slumped in London after 2025 revenue missed expectations.

U.S. Economic News

A highly anticipated report released by the Commerce Department on Friday showed consumer prices in the U.S. increased by slightly more than expected in the month of December.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.4 percent in December after inching up by 0.2 percent in November. Economists had expected prices to rise by 0.3 percent.

The report also said the PCE price index in December was up by 2.9 percent compared to the same month a year ago, reflecting an uptick from 2.8 percent in November. The annual rate of growth was expected to remain unchanged.

Excluding food and energy prices, the core PCE price index still increased by 0.4 percent in December after rising by 0.2 percent in November. Core prices were expected to grow by 0.3 percent.

The annual rate of growth by the core PCE price index accelerated to 3.0 percent in December from 2.8 percent in November. Economists had the pace of growth to inch up to 2.9 percent.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income rose by 0.3 percent in December after climbing by 0.4 percent in November, while personal spending grew by 0.4 percent in December, matching the increase seen in November.

A separate report released by the Commerce Department showed economic growth in the U.S. slowed by much more than anticipated in the fourth quarter of 2025.

The report said gross domestic product climbed by 1.4 percent in the fourth quarter after surging by 4.4 percent in the third quarter. Economists had expected GDP to jump by 2.8 percent.

The Commerce Department noted increases in consumer spending and investment were partly offset by decreases in government spending and exports.

The bigger than expected slowdown by GDP growth compared to the previous quarter reflected the downturns in government spending and exports and a deceleration in consumer spending.

At 9:45 am ET, Atlanta Federal Reserve President Raphael Bostic is due to participate in a moderated conversation on the economic outlook before event hosted by the Birmingham Business Journal.

The Commerce Department is scheduled to release its report on new home sales in the months of November and December at 10 am ET. New home sales are expected to come in at annual rates of 735,000 in November and 728,000 in December.

Also at 10 am ET, the University of Michigan is due to release its revised reading on consumer sentiment in the month of February. The consumer sentiment index for February is expected to be unrevised from the preliminary reading of 57.3, which was up from 56.4 in January.

St. Louis Federal Reserve President Alberto Musalem is scheduled to appear on Fox Business at 3:30 pm ET.