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US futures search for direction after coming off record highs


Investing.com– U.S. stock index futures traded largely flat Friday, searching for direction at the end of a week that has seen record index highs. 

At 06:20 ET (10:20 GMT), Dow Jones Futures were down 11 points, or 0.1%, S&P 500 Futures traded largely flat, while Nasdaq 100 Futures were 7 points, or 0.1%, higher. 

The main Wall Street indices closed lower Thursday, as investors took profits in the wake of softer-than-expected consumer inflation readings, which drove these averages to record highs on Wednesday and Thursday. 

The S&P 500 fell 0.2%, after breaking above the closely watched 5,300 level for the first time on Wednesday, while the NASDAQ Composite fell 0.3% after also reaching an all-time high. The Dow Jones Industrial Average fell 0.1% after earlier Thursday breaking above the psychologically-important 40,000 level for the first time ever.

Despite Thursday’s losses, all three indices are on track to record healthy gains this week.

Hawkish Fed officials weigh 

Weighing on sentiment was a slew of Fed officials warning this week that the central bank still needed more confidence to cut interest rates, and that the timing of the move remained uncertain. 

Atlanta Fed President Raphael Bostic welcomed the softer inflation data, but warned that one positive data point did not indicate a trend, and that no expectations for rate cuts were locked in by the central bank.

Before Bostic, New York Fed President John Williams said that while the development in consumer inflation was positive, it still did not warrant an immediate reduction in interest rates. 

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Cleveland Fed President Loretta Mester said that the Fed needed to hold rates high for longer to bring inflation down, and that the central bank needed more evidence that price pressures were cooling.

All three Fed officials are voting members of the Fed’s rate-setting committee.

Their comments saw investors second-guess expectations for rate cuts this year, with traders slightly paring bets on a reduction of 25 basis points in September, according to the CME Fedwatch tool. 

Reddit surges on OpenAI partnership

The earnings season is steadily winding down, but there are still a few companies reporting their quarterly results.

Take-Two Interactive Software (NASDAQ:TTWO) fell 2.6% premarket after it issued disappointing annual earnings guidance, with the videogame publisher set to release its hotly awaited GTA VI title only in 2025. 

DXC Technology (NYSE:DXC) sank over 20% after it also offered disappointing annual guidance. 

Additionally, social media platform Reddit (NYSE:RDDT) jumped over 13% premarket after it entered a partnership with artificial intelligence major OpenAI to add its content to the firm’s AI products. 

So-called meme stocks GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) saw some relief in premarket trade, rising 7% and 5%, respectively. The two plummeted between 15% and 30% on Thursday as a rebound rally ran dry.

Crude on track for weekly gains

Crude prices edged higher Friday, putting them on course for weekly gains fueled by signs of improving demand and slowing inflation in the United States, the largest consumer of crude in the world.

By 06:20 ET, the U.S. crude futures traded flat at $79.23 per barrel, while the Brent contract climbed 0.1% to $83.35 a barrel. Both contracts are on track to post weekly gains of around 1%.

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Oil markets have been boosted by the softer-than-expected inflation release, which has increased the prospect of lower rates, potentially lifting future global economic activity and thus oil demand.

A drop in U.S. oil inventories also bolstered hopes that demand was improving, especially as the travel-heavy summer season approaches.

(Ambar Warrick contributed to this article.)

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