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US stock futures pointed to another rough day on Wall Street Friday after the House of Representatives voted against a Trump-backed spending bill, further increasing the odds of a US government shutdown this weekend.
Investors are also awaiting key inflation data for further clues into future monetary policy after the Federal Reserve lowered the number of cuts it expects next year.
Futures tied to the S&P 500 (ES=F) dropped 1%, while those on the tech-heavy Nasdaq (NQ=F) plunged 1.3%. Dow Jones Industrial Average futures (YM=F) also fell around 0.5%.
A Fed-induced sell-off earlier in the week left the major averages reeling. And although stocks mostly stabilized on Thursday, the threat of a government shutdown, coupled with more Trump tariff threats on Europe, pressured global markets across the board.
“I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas,” Trump said in a post on Truth Social. “Otherwise, it is TARIFFS all the way!!!”
Global chip stocks sold off premarket, with Europe’s ASML (ASML) dropping nearly 2% early Friday while Taiwan’s TSMC (TSMC34.SA) fell about 3%. US-based names such as Nvidia (NVDA), AMD (AMD), and Broadcom (AVGO) also came under pressure.
Bitcoin (BTC-USD) prices retreated nearly 10% from earlier highs to drop below the critical $100,000 mark amid record ETF outflows.
And in individual names, Novo Nordisk (NVO) plunged about 20% — the most in over two decades — after its obesity drug trial disappointed investors. Tesla (TSLA) shares dropped 6% after recalling about 700,000 US vehicles over a tire pressure monitoring system defect.
Meanwhile, investors will digest another piece of the inflation puzzle with the release of the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, due later this morning..
On Wednesday, the Fed scaled back the number of rate cuts it expects in 2025 from four to just two, suggesting the central bank will take a more cautious approach after launching its long-awaited easing cycle earlier this year.
LIVE 2 updates
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Here comes another inflation report…
Investors this morning will closely be monitoring a key inflation report set to shape future monetary policy.
The Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, which strips out volatile food and energy costs, is expected to have risen 0.2% month over month in November after prices rose 0.3% in October, according to Bloomberg data.
Over the prior year, Wall Street expects core prices to rise 2.9%, ahead of the 2.8% gain seen in October.
Overall PCE is expected to increase 2.5% year over year, an acceleration from October’s 2.3% annual increase.
The report, which will be released at 8:30 a.m. ET, comes after the central bank slashed interest rates by 25 basis points at its last policy meeting of the year on Wednesday. Officials also signaled less easing to come in 2025 with inflation expected to remain elevated over the longterm.
Earlier this month, the core Consumer Price Index (CPI), which strips out the more volatile costs of food and gas, saw prices in November climb 3.3% over last year for the fourth consecutive month.
Meanwhile, the core Producer Price Index (PPI), which tracks the price changes companies see, revealed prices increased by 3.4% annually in November. That’s up from a 3.1% jump in October and also ahead of economist expectations of a 3.2% increase.
In a press conference following Wednesday’s interest rate decision, Federal Reserve Chair Jerome Powell indicated that the last mile of the Fed’s fight to curb inflation has been more challenging than central bank leaders initially projected.
“We’ve had a year-end projection for inflation, and it’s kind of fallen apart as we approach the end of the year,” Powell said. “I can tell you that might be the single biggest factor — inflation has once again underperformed relative to expectations.”
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Good morning. Here’s what’s happening today.
Economic data: PCE inflation (November), Personal income (November), Personal spending (November), University of Michigan consumer sentiment index (December, final), Kansas City Fed services activity (December)
Earnings: Carnival Corporation (CCL), Winnebago (WGO)
And here are some stories you may have missed early this morning or overnight…
House rejects Trump-backed plan on government shutdown, leaving next steps uncertain
Trump wants EU to buy more US oil and gas or face tariffs
Bitcoin pullback deepens as US ETFs suffer record daily outflow
Oil falls on demand growth concerns, robust dollar
Biden Cancels Nearly $4.3 Billion in Public Worker Student Debt
Novo Nordisk shares plunge after CagriSema obesity drug trial disappoints
FDA finalizes decision to end Lilly’s GLP-1 shortage, analysts predict Novo will be next
Tesla recalls nearly 700,000 vehicles in US over tire pressure monitoring system issue
Amazon workers strike at seven US facilities ahead of Christmas rush
Starbucks workers’ union plans strike in 3 US cities ahead of Christmas rush
Foxconn Interest in Nissan Said on Hold Amid Honda Merger Talks
Nike CEO Elliott Hill: Our turnaround will be challenging, and will hinge on sports
