US stock futures inched lower on Friday as Wall Street assessed the current state of the economy from a record-setting vantage point, just ahead of the Federal Reserve’s anticipated interest rate decision next week. Dow Jones Industrial Average futures and S&P 500 futures slipped approximately 0.1%, while contracts on the tech-heavy Nasdaq 100 dipped slightly below the neutral line. Notably, all three major indexes had surged to record highs on Thursday, with the Dow closing above 46,000 for the first time.
Investors have been digesting recent economic data to gauge the Fed’s upcoming actions. In the past week, jobs data has indicated notable weaknesses in the labor market, including the addition of just over 20,000 jobs last month and a significant increase in weekly initial jobless claims, which have reached a near four-year high. Additionally, inflation pressures remain persistent, with consumer prices rising amid indications that the tariffs instituted by the Trump administration are beginning to impact the economy. Despite these challenges, many investors are betting that inflation is moderate enough for the Fed to implement a rate cut in the upcoming meeting—and potentially more cuts before the year concludes.
Traders are currently pricing in over a 90% probability of a quarter-point cut during September’s Federal Open Market Committee meeting. Furthermore, there is about an 80% expectation that the central bank may reduce rates the equivalent of three times by the end of the calendar year.
In the lead-up to the Fed’s meeting, trading activity is expected to quiet down. However, Friday will feature an initial consumer sentiment reading from the University of Michigan for the month. While most indicators suggest steady consumer spending, there is a growing sense of dissatisfaction among Americans regarding their purchasing power and the job market as a whole.
Currently, all three major stock indexes appear to be on course for weekly gains of around 1.6%. The Dow is poised for its first victory in three weeks after achieving the noteworthy milestone of crossing 46,000, while the S&P 500 and Nasdaq Composite are set to enjoy their best performance since early August.
In corporate news, Opendoor has captured attention following the appointment of Kaz Nejatian as its new CEO, poached from Shopify. This leadership change has drawn praise from JP Morgan analyst Dae Lee, who maintains an overweight rating on the stock. Lee noted that Eric Jackson from EMJ Capital is vocal about Opendoor’s undervaluation, which has helped the stock gain recognition among retail investors.
Attention has also turned to Comcast amidst rumors concerning a potential acquisition bid for Warner Bros. Discovery from Paramount Skydance. Following a remarkable 29% surge on Thursday, Warner Bros. Discovery shares rose an additional 4% in premarket trading. MoffettNathanson analyst Robert Fishman suggested that a bidding war for the company could be on the horizon.
In other noteworthy news, shares of Adobe rose in premarket trading after the software giant provided an optimistic revenue forecast for the quarter through November, hinting at a positive return on investment from its integration of AI features into its products.
Finally, gold is on track to record its fourth consecutive week of gains, driven by heightened enthusiasm among both individual and institutional investors regarding potential rate cuts, leading to increased investment in bullion-backed ETFs as a safe haven asset.
