The rally in U.S. stocks stalled before the bell on Friday as investors made time for an inflation report seen as crucial to the Federal Reserve’s next decision on interest rate cuts.
Futures on the S&P 500 (ES=F) were little changed after hitting a third record high this week, while futures on the Dow Jones Industrial Average (YM=F) were also flat. Contracts on the tech-heavy Nasdaq 100 (NQ=F) fell 0.2%.
The gauges are still on track for a weekly gain as confidence in the economy returns to the market. A solid GDP figure reinforced growing belief that the Fed can make a soft landing as it begins a rate-cutting campaign. But investors are still wary of new data as they debate the pace of easing.
Read more: What the Fed’s interest rate cut means for bank accounts, CDs, loans and credit cards
The August reading of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation measure, is seen as crucial to these calculations. Although policymakers have turned their attention to the labor market, they have still fallen short of their 2% inflation target.
Analysts expect the annualized PCE print to be 2.3%, up from 2.5% in July, when it was released at 8:30 a.m. ET. That would support the Fed’s decision to cut rates by 50 basis points last week and leave room for another jumbo cut in November. But any sign of continued price pressure could revive concerns that policymakers have stepped on the brakes too early.
Elsewhere, China expanded its suite of stimulus measures, giving markets another boost. Mainland stocks posted their biggest weekly gain since 2008, and luxury stocks are set for their best week in years as hopes rise for Chinese demand. Meanwhile, shares of Alibaba (BABA, 9988.HK), JD.com (JD, 9618.HK) and Meituan (3690.HK, MPNGY) rose during the buying spree.
In other individual stock moves, shares of Costco (COST) fell in premarket trading after the wholesale giant’s sales disappointed Wall Street.