Updated 2 min read
US stock futures edged lower on Friday as Wall Street took stock of the US economy from a lofty, record-setting perch ahead of the Federal Reserve’s highly anticipated decision on interest rates next week.
Dow Jones Industrial Average futures (YM=F) and S&P 500 futures (ES=F) both fell roughly 0.2%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) slipped just below the flat line. All three major indexes rallied to records on Thursday, with the Dow (^DJI) closing above 46,000 for the first time.
Investors have taken in several weeks’ worth of economic data to gain clues on the Fed’s next move. Over the last week, jobs data has shown clear signals of labor market weakness, with just over 20,000 jobs added last month and initial jobless claims surging to a near four-year high.
Meanwhile, inflation remains stubborn, with consumer prices rising last month amid more signs that President Trump’s tariffs are filtering their way into the economy. But investors are betting inflation is tame enough for the Fed to cut next week — and then some.
Traders are pricing in a more than 90% chance of a quarter-point cut when the Fed holds its September meeting. Beyond that, around 80% expect the central bank to cut the equivalent of three times before the end of the year.
Read more: The latest on Trump’s tariffs
Along with stocks, Treasuries rallied on Thursday. The 10-year yield (^TNX) fell to near 4%, around its lowest levels of the year, but recovered slightly on Friday. The 30-year yield (^TYX) ticked up to 4.67%, having dropped below 4.65% the previous session and after touching 5% last week. Meanwhile, gold (GC=F) notched fresh records.
The lead-up to the Fed in the next few days will likely be quieter. But Friday brings an initial reading of consumer sentiment this month from the University of Michigan. Though most signals point to consumer spending holding steady, Americans are souring on their purchasing power — and on the job market as a whole.
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Eyes on Comcast after Paramount/Warner Bros. chatter
Warner Bros. Discovery (WBD) up another 4% pre-market after its 29% surge on Thursday, following news of Paramount Skydance (PSKY) preparing a bid for the company.
I wouldn’t rule out a potential bidding war for Warner Bros. Discovery. Good point this morning on this from MoffettNathanson analyst Robert Fishman:
“The good news for WBD and its shareholders is that there are a number of different potential dance partners for either the whole company or its valuable pieces that could still lead to some competition for PSKY. Consider Comcast (CMCSA), who we’ve argued is another plausible bidder for Warner Bros. after the split. The strength of their combined studios and streaming platforms, plus the opportunity to monetize Warner Bros. I.P. with Universal Theme Parks and the potential for cost synergies between Versant and WBD’s cable network portfolio, further underscores the strategic logic of such a pairing. But would Comcast be willing to enter a bidding war for the full company while also bearing the added uncertainty of regulatory scrutiny? Any effort to acquire WBD could also jeopardize the tax-free status of Comcast’s planned Versant spin-off, and could therefore potentially require scuttling the separation altogether, at least temporarily. These considerations could end up keeping Comcast on the sidelines.”
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Adobe stock pops after strong outlook suggests AI payoff
Shares in Adobe (ADBE) stepped higher in premarket after the Photoshop maker gave an upbeat revenue forecast for the quarter through November.
The outlook suggested that Adobe is starting to see a payoff from adding AI features to its software tools.
Bloomberg reported:
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Gold on track for fourth week of consecutive gains
Gold (GC=F) tracked its trajectory for four weeks of consistent gains as rate-cut bet fervour spread from investors to institutions, with bullion-backed ETFs moving heavily toward the haven asset.
Bloomberg reports:
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OpenAI move to for-profit will retain $100 billion for non-profit business arm
Bloomberg reports:
