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Stock futures were sliding on Friday as investors proved reluctant to buy the dip ahead of a consumer-price inflation report that could make it tougher for the Federal Reserve to cut interest rates over the next few months.
Futures tracking the Dow Jones Industrial Average slipped 49 points, or 0.1%. S&P 500 futures were also 0.1% lower, while contracts tied to the tech-heavy Nasdaq 100 were flat.
The three major indexes all sank on Thursday, dragged down by yet another wave of artificial-intelligence selling. The tech-heavy Nasdaq Composite fell 2%. The Roundhill Magnificent Seven ETF, which tracks the share price of seven megacap tech giants, closed in correction territory. It’s down just under 11% from the high it hit in late October.
Software and logistics stocks took a battering after Algorhythm Holdings, which until recently sold karaoke machines, touted an AI tool it said could reduce trucking inefficiencies.
It sums up “the state of markets at the moment that a $6 million market cap company that until recently specialised in Karaoke helped wipe tens of billions off logistics stocks,” said Deutsche Bank analyst Jim Reid. “I’ve seen some shocking Karaoke performances in my time but this perhaps tops them all.”
The January consumer price index report due out early Friday could pile on more pain for investors. Economists expect the data to show that inflation rose 2.5% from a year ago, lower than December’s 2.7% gain.
Markets don’t expect the Fed to cut rates until at least June, according to CME’s FedWatch tool. But a hotter-than-expected inflation reading could further weaken the case for the Fed to slash rates, removing one potential source of comfort amid the AI jitters.
Bonds, commodities, and currencies weren’t making any major moves ahead of the inflation print.
The yield on the 10-year Treasury note ticked up 2 basis points to 4.10%. The Brent and West Texas Intermediate oil benchmarks were flat, with investors now a lot less worried that tensions between the U.S. and Iran could disrupt crude supplies. The dollar climbed 0.1% against a weighted basket of peers.
