By Medha Singh and Shashwat Chauhan
(Reuters) – Wall Street’s major indexes were set to open lower on Friday after the S&P 500 and Nasdaq posted six straight sessions of gains after a flood of encouraging economic data fueled a broad recovery led by heavyweight technology and growth stocks.
The benchmark index recovered from a decline earlier in the month caused by a gloomy U.S. jobs report and the yen carry trade, as better-than-expected data calmed nerves amid a sharp slowdown in the world’s largest economy.
US consumer and producer price data released this week suggested that inflation is moderating at a pace that keeps the Federal Reserve on track to begin its monetary easing cycle with a 25 basis point rate cut next month rather than taking a more aggressive move.
“The signal from this week’s data is that the sky is not falling, as some investors had feared,” said Mike Reynolds, vice president of investment strategy at Glenmede.
“The totality of the data we have received so far in advance (of the next Fed meeting) really makes a strong case for rate cuts.”
The US Federal Reserve is now expected to monitor developments in the labour market more closely.
For further clues on the future course of the rate cut, market participants will be paying attention to the minutes of the Fed’s latest meeting next week, as well as Fed Chairman Jerome Powell’s outlook for the U.S. economy at the Jackson Hole Symposium, an annual meeting of international central bankers.
The S&P 500 and Nasdaq were headed for their best weeks since October, while the Dow was headed for its best weekly performance since December.
Later in the day, the University of Michigan will release its consumer sentiment survey for August around 10 a.m. ET (2 p.m. GMT).
In an interview with National Public Radio, Chicago Fed President Autan Goolsbee said the U.S. economy is showing no signs of overheating, so central bankers should be wary of maintaining their restrictive policies longer than necessary.
St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic both pointed to a rate cut in September on Thursday.
At 8:15 a.m. ET, the Dow E-minis were down 28 points, or 0.07%, the S&P 500 E-minis were down 13 points, or 0.23%, and the Nasdaq 100 E-minis were down 50.25 points, or 0.26%.
Applied Materials fell nearly 3% in premarket trading after its numbers jumped sharply. The chipmaker forecast fourth-quarter revenue that was slightly above Wall Street estimates.
Amcor’s U.S.-listed shares fell 6.1 percent after the packaging company reported a larger-than-expected decline in fourth-quarter sales due to weaker demand for containers and cartons.
Crypto and blockchain-related companies gained as Bitcoin rose 2.8%. Miners Riot Platforms and Marathon Digital each gained nearly 1%, while the iShares Bitcoin Trust ETF gained 2.2%.
U.S. stocks recorded inflows for the seventh consecutive week last week, with large caps accounting for the bulk of the inflows while growth stocks saw slight outflows, according to Bank of America data.
Overall, trading volume in U.S. stocks has been below its 20-day moving average over the past six sessions as many investors are on summer break.
(Reporting by Medha Singh and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel)
