Futures rise in countdown to key inflation data, Trump Media spikes

June 28 (Reuters) – U.S. stocks ended weaker on Friday after an early rally fizzled as investors digested in-line inflation data and weighed political uncertainty after the U.S. presidential debate.

Nike had its steepest one-day fall in over two decades after a gloomy forecast.

“I don’t think the inflation number changes much because the Federal Reserve has been pretty serious about their 2% target and remains disciplined,” said Ann Miletti, Allspring’s head of active equity.

Data showed U.S. monthly inflation was unchanged in May, an encouraging development after strong price increases earlier this year raised doubts over the effectiveness of the Fed’s monetary policy.

The Commerce Department report also showed consumer spending rose marginally last month, fueling optimism that the U.S. central bank could engineer a much-desired “soft landing” for the economy.

Bets on a rate cut in September rose to 66% after the personal consumption expenditures price index release, LSEG FedWatch data showed.

Traders have maintained bets on two cuts despite Fed projections of just one this year, as they hope inflation will keep cooling.

The first debate on Thursday between U.S. President Joe Biden and Republican rival Donald Trump also weighed on stocks, said Thomas Martin, senior portfolio manager at Globalt Investments, citing the incumbent’s shaky performance.

“People are trying to think about what’s going to happen with the presidential election. So instead of uncertainty decreasing after the debate, it’s increased,” he said.

Treasury yields reversed early losses to end higher, adding pressure on some megacap stocks.

San Francisco Fed President Mary Daly acknowledged the cooling inflation, and noted that it is “good news that policy is working.” Fed Governor Michelle Bowman said the central bank would follow its own path as its inflation goal has yet to be reached.

Volume surged toward the closing bell when the FTSE Russell finalized the reconstitution of its indexes. It was the second biggest daily volume of the year.

Advancing issues outnumbered decliners by a 1.29-to-1 ratio on the NYSE, which had 271 new highs and 75 new lows.

The S&P 500 posted 16 new 52-week highs and one new low while the Nasdaq Composite recorded 58 new highs and 139 new lows.

Sign up here.

Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Maju Samuel and Richard Chang

Our Standards: The Thomson Reuters Trust Principles., opens new tab