FX.co ★ U.S. Stocks May Move To The Upside As Inflation Data Matches Estimates

Stocks are poised for an upward move in early trading on Friday following the release of significant inflation data. Futures for the major indexes are pointing to a higher open, with S&P 500 futures up by 0.4 percent.

Early buying interest is likely to be spurred by a Commerce Department report indicating that consumer price inflation for May aligned with economists' expectations.

According to the report, the personal consumption expenditures (PCE) price index was unchanged in May after a 0.3 percent rise in April, meeting anticipated figures. The core PCE price index, which excludes food and energy costs, edged up by 0.1 percent in May following a revised upward growth of 0.3 percent in April. Economists had forecasted this core index to rise by 0.1 percent, slightly lower than the initially reported 0.2 percent increase for April.

Moreover, the Commerce Department noted that the annual growth rates for both the PCE price index and the core PCE price index decelerated to 2.6 percent from 2.7 percent and 2.8 percent, respectively, meeting predictions.

These inflation readings, favored by the Federal Reserve, were part of the Commerce Department's report on personal income and expenditure, which revealed that personal income increased slightly more than expected, while personal spending rose marginally less than anticipated.

The slowing rates of consumer price increases may foster optimism about the future of interest rates, as Federal Reserve officials have stressed the need for greater assurance that inflation is slowing before considering rate cuts.

Shortly after the opening bell, MNI Indicators is set to release its June report on Chicago-area business activity. The Chicago business barometer is expected to rise to 40.0 in June from 35.4 in May, though a reading below 50 still suggests contraction.

The University of Michigan will also release its revised June consumer sentiment reading. Consumer sentiment is expected to be revised upwards to 65.8 from 65.6, still down from 67.4 in May.

On Thursday, ahead of the eagerly awaited inflation data release, stocks exhibited lackluster performance, with major averages oscillating around the unchanged line throughout the day. The major averages eventually ended modestly higher: the Dow edged up 36.25 points (0.1 percent) to 39,164.06, the Nasdaq advanced 53.53 points (0.3 percent) to 17,858.68, and the S&P 500 inched up 4.97 points (0.1 percent) to 5,482.87.

Internationally, Asia-Pacific markets mostly trended higher on Friday. Japan's Nikkei 225 Index gained 0.6 percent, and China's Shanghai Composite Index rose by 0.7 percent.

In contrast, European markets are exhibiting mixed results. France's CAC 40 Index has fallen by 0.8 percent, while Germany's DAX Index is up by 0.1 percent, and the U.K.'s FTSE 100 Index has increased by 0.2 percent.

In the commodities market, crude oil futures are advancing $0.39 to $82.13 per barrel, after an increase of $0.84 to $81.74 per barrel on Thursday. Gold futures are climbing $12.90 to $2,349.50 an ounce, following a $23.40 jump to $2,336.60 an ounce in the prior session.

On the currency front, the U.S. dollar is trading at 160.57 yen, down slightly from 160.76 yen at Thursday’s close in New York. Against the euro, the dollar stands at $1.0701, compared to yesterday's $1.0704.