Dow futures plunged 160 points on Friday as investors looked ahead to the release of the Fed’s go-to inflation gauge, the Personal Consumption Expenditures (PCE) index.
The report could influence whether rates move in September. The slight pullback comes after the Dow hit a record high yesterday, showing both the market’s confidence in the economy and its nerves over global challenges and choppy earnings.
Traders are treading carefully, taking some profits while waiting for fresh economic signals.
5 things to know before Wall Street opens
1. Traders are zeroed in on July’s PCE report, the Fed’s preferred inflation measure. Forecasts call for a 2.6% annual gain, the same as June. The release will be key for September’s Fed meeting, with futures now tilting toward a rate cut.
The question is whether inflation looks soft enough to give policymakers cover to ease, especially with the job market showing cracks and global jitters hanging over sentiment.
2. Global stock markets kicked off the day going in different directions. Chinese stocks actually bounced back as their tech companies showed some staying power, but European and Japanese markets slipped a bit.
Everyone’s still trying to figure out what Trump’s tariff threats actually mean for business.
The tariffs are becoming a real headache. American companies with operations overseas are seeing their profits take a hit, and supply chains that took decades to build are getting scrambled.
It’s not just about moving factories around anymore as entire business strategies are getting rewritten.
3. Tech stocks dragged US futures lower, led by a nearly 13% drop in Marvell after the chipmaker warned on data center demand.
The weak outlook rippled across AI and semiconductor names, cutting into the sector’s recent record-setting run. Marvell’s caution has investors questioning how long the AI-driven rally can last, even with strong results from Nvidia and other heavyweights.
4. Before the market even opened, some big names were already making waves with their latest earnings reports.
Dell got hammered, dropping 6% after their profit margins came in weaker than anyone expected. Sure, they tried to sound upbeat about the rest of the year, but investors weren’t buying it.
On the flip side, Affirm shot up 15% after actually turning a profit this quarter. They beat expectations across the board, which is huge for the “buy now, pay later” industry that’s been getting beaten up lately.
5. Fresh data paints a mixed picture of the US economy. Second-quarter GDP was revised up to 3.3% annualized, underscoring solid growth, but labor indicators are softening.
Consumer surveys point to fading confidence in job availability, adding to signs of cooling.
The blend of strength and strain is shaping bets on near-term Fed moves and keeping global investors cautious.
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