S&P, Dow, and Nasdaq futures whipsaw around as they look for direction

Stock index futures trade in a choppy formation on Friday morning as PCE price index data rose more than forecasters expected for the month of August.

Early on and the S&P 500 (SPX) has moved higher by 0.1%, the Dow (INDU) lost 0.1%, and the Nasdaq 100 (NDX.IND) is near flat.

Treasury yields are mixed in premarket trading. The U.S. 10 Year Treasury yield (US10Y) has have fallen 4 basis points to 3.70%, and the U.S. 2 Year Treasury yield (US2Y) has gained 1 basis point to 4.17%.

Across the pond, the annual inflation rate in the Euro Area jumped to 10% in September of 2022 from 9.1% in August. The increase has touched a fresh record high in September, preliminary estimates have shown.

On an economic front, PCE price index MoM data was stronger than anticipated at +0.3% versus the expected +0.2%.

Moreover, personal spending MoM data for August was 0.4%, higher than the forecasted 0.2%. Personal income MoM for August came in at 0.3%, in line with the consensus figure.

Shortly after the bell, Wall Street will also get Chicago PMI figures, and final consumer sentiment figures for September.

In an investor note, Citi outlined: “The US Equity markets remain under pressure as we end Q3. Fed hawkishness is exceeding expectations from a quarter ago, as its determination to drive inflation back to the 2% target was reinforced at the latest Fed meeting. Gradually, rising rate headwinds on valuation are giving way to concern regarding the economic consequences of current FF rate trajectories.”

“Many economic indicators show signs of deterioration, yet inflation readings remain sticky. We continue to expect earnings resilience into the Q3 reporting period.”

AllianceBernsein added: “We believe growth stocks’ valuations are far more attractive today than they were a year ago.”

“Active investors should focus on companies with resilient business models and high, consistent profitability, based on metrics such as return on assets and return on invested capital.”

Among active stocks, shares of Nike have dropped to new trading lows after efforts to clear inventory hit margins according to its latest FQ1 earnings report.