Stock futures gain, shrugging off recent inflation reports

U.S. equity futures are poised for a rebound following losses this week brought on by inflationary reports and recession concerns.

The major futures indexes suggest a gain of 0.7% when the final trading day of the week gets underway on Wall Street.

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U.S. benchmark crude oil gained $1.21 to reach $107.34 per barrel in electronic trading on the New York Mercantile Exchange. It gained 42 cents to reach $106.13 per barrel on Thursday.

Brent crude, the pricing basis for international trading of crude, added $1.45 to reach $108.90 per barrel.

Federal Reserve Chair Jerome Powell, fresh off winning Senate confirmation for a second four-year term for the first time Thursday, acknowledged that high inflation and weakness in other economies could thwart his efforts to avoid a recession.

Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee on Capitol Hill in Washington. (AP Photo/Susan Walsh)

The Labor Department’s report that wholesale prices rose 11% in April from a year earlier adds to concerns that manufacturing costs are being passed on to consumers, who might pull back on spending, crimping economic growth.

WHOLESALE INFLATION CLIMBS 11% IN APRIL, REMAINING NEAR 40-YEAR HIGH

On Wednesday, the Labor Department’s report on consumer prices came in hotter than Wall Street expected, showing a bigger increase than expected in prices outside food and gasoline. That “core inflation” can be more predictive of future trends.

Traders will get one more inflation-related report on Friday morning in the form of import and export prices for April. 

Traders work on the floor of the New York Stock Exchange REUTERS/Brendan McDermid 

Prices of imported goods likely rose 0.6% month-over-month, down from March’s 2.6% surge, the biggest increase in 11 years. Watch for export prices to rise by 0.7% in April, also down from a record 4.5% spike the previous month. Smaller gains in import and export prices would support the view that inflation has peaked.

The University of Michigan releases its preliminary index of consumer sentiment for May. The Refinitiv estimate is 64.0, down just over a point from April’s final reading of 65.2. Sentiment has fallen 26% from a pandemic high of 88.3 in April 2021 as consumers worry about the rapid rise in prices for goods and services:

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Bitcoin traded around $30,000, snapping a seven-session losing streak after hitting a 16-month low of around $25,400 on Thursday.

In Asia, the Nikkei 225 in Tokyo jumped 2.8%, Hong Kong’s Hang Seng index gained 2.2% and China’s Shanghai index added 0.9%.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 31730.3 -103.81 -0.33%
SP500 S&P 500 3930.08 -5.10 -0.13%
I:COMP NASDAQ COMPOSITE INDEX 11370.961528 +6.73 +0.06%

On Thursday, the S&P 500 closed 0.1% lower, at 3,930.08, having been down 1.9% earlier in the day. The Dow Jones Industrial Average fell 0.3% to 31,730.30, while the Nasdaq rose 0.1% to 11,370.96.

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The indexes are on pace for sharp weekly declines, extending the market’s slump so far this year.

The Associated Press contributed to this report.

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