US stock futures moved higher on Friday as investors awaited August consumer inflation data ahead of the Federal Reserve’s interest-rate decision next week.
At 02:57 ET (06:57 GMT), Dow futures were up 232 points, or 0.5%, while S&P 500 futures gained 33 points, or 0.4%. Nasdaq 100 futures advanced 120 points, also up 0.4%.
The gains followed another lower session on Wall Street on Thursday, when the S&P 500 declined for a fourth consecutive trading day. Analysts at Deutsche Bank attributed part of the pressure to “another terrible day for bonds.”
The US 10-year Treasury yield continued to move towards 5%, while markets assessed the potential inflationary impact of higher oil prices. The European Central Bank also raised interest rates on Thursday, while money markets were pricing in additional increases over the coming year.
“The combination of higher energy prices and a hawkish ECB put fresh pressure on sovereign bonds across the board,” Deutsche Bank analysts said.
US CPI Data in Focus Ahead of Fed Decision
Economists expect the US Consumer Price Index to increase 0.4% month on month in August, compared with 0.1% previously, with higher gasoline prices contributing to the expected acceleration.
Annual headline inflation is forecast at 3.4%, unchanged from July.
Core CPI, which excludes food and energy, is expected to increase 0.2% month on month and 2.4% year on year. In July, the respective readings were 0.2% and 2.5%.
The figures will be released ahead of the Federal Reserve’s two-day policy meeting next week. The source said expectations for a potential rate increase were also supported by Thursday’s data showing faster price increases in several components that feed into the personal consumption expenditures price index.
Brent Crude Remains Above $100
Brent crude futures moved lower on Friday but remained above $100 per barrel as markets continued to assess developments affecting Middle East shipping routes.
“Once again, it is geopolitical fears driving everything,” Deutsche Bank analysts said.
Iran-backed Houthi forces in Yemen captured a port city on Thursday, raising concerns about tanker traffic around the Bab el-Mandeb Strait, which connects the Red Sea with the Gulf of Aden.
Vessel transits through the Strait of Hormuz fell to seven on Thursday, compared with a 10-day moving average of 15, according to shipping data cited by Reuters.
Brent prices subsequently declined after the Financial Times reported that Gulf foreign ministers and Iranian authorities were seeking a temporary agreement covering shipping through the Strait of Hormuz.
Oracle Raises Full-Year Profit Guidance
Oracle (NYSE:ORCL) reported quarterly revenue and earnings above analyst expectations and increased its full-year profit guidance.
The company has been expanding its cloud infrastructure operations to support artificial intelligence workloads alongside its database software and enterprise applications businesses.
“Customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply,” Oracle said in a statement.
Oracle booked more than $30 billion of additional AI cloud contracts during the quarter, increasing remaining performance obligations to $664 billion.
The company said most of the newly contracted revenue will not require substantial additional spending on semiconductors and maintained its annual expenditure target of $90 billion to $95 billion.
Oracle shares moved higher in extended-hours trading following the results.
Adobe Beats Q3 Estimates, Issues Q4 Revenue Guidance
Adobe (NASDAQ:ADBE) reported third-quarter adjusted earnings per share of $6.13, above the analyst consensus of $6.07.
Revenue reached $6.76 billion, compared with expectations of $6.69 billion.
For the fourth quarter, Adobe forecast revenue of between $6.80 billion and $6.85 billion. The midpoint of $6.825 billion was below the analyst consensus of $6.85 billion.
Adobe expects fourth-quarter adjusted earnings per share of $6.30 to $6.35. Shares moved lower in extended-hours trading following the announcement.