The U.S. stock market fell on Friday as a result of a less optimistic outlook from Intel, raising anticipation around a crucial inflation report that may influence the timing of an interest rate cut.
S&P 500 futures fell after a positive Thursday, where the benchmark index hit another all-time high. Dow Jones Industrial Average futures also remained below the line, while Nasdaq 100 futures, which represent the technology sector, saw a drop of almost 0.3%.
Technology stocks took a hit when Intel’s first-quarter outlook fell well short of Wall Street’s expectations, overshadowing the optimism that drove the stock to record highs. In pre-market trading, Intel shares plunged more than 10%, with AMD and Nvidia also seeing a slight decline.
Investors’ attention now turns to the release of the December PCE index, as a preliminary reading on fourth-quarter economic growth exceeded expectations. This could potentially bolster the case for the Federal Reserve to delay rate cuts beyond March as it seeks to achieve a “soft landing” for the economy.
Additionally, the quarterly PCE GDP report’s view suggests that inflation is trending favorably for the Federal Reserve. The next monthly update is expected to reveal that the annual “core” PCE, excluding food and energy, stands at 3%.
At the same time, investors are eagerly awaiting the next set of earnings reports, which will provide greater clarity on the health of U.S. companies and the broader economy. Friday’s highlights include Colgate-Palmolive and American Express, particularly after Visa’s conservative revenue growth forecast in the payment card sector.
Also read: Tesla Stock Faces 9% Drop on Fourth-Quarter Earnings Shortfall, Lowered Production Growth Forecast