S&P 500 Futures Slip Back as Traders Brace for PCE Report

US stock futures gave back their early gains as traders dialed down aggressive positioning ahead of the release of the Federal Reserve’s preferred inflation report. Meanwhile, Treasuries are heading toward what could be their weakest week since June.

‍

S&P 500 futures initially rose as much as 0.3%, only to pare that advance after the benchmark index closed just shy of a new all-time high. Treasury losses deepened at the same time, pushing the 10-year yield up by one basis point to 4.11%.

‍

Markets are still widely expecting the Fed to deliver a rate cut next week, and current pricing suggests investors see additional easing continuing well into 2026. The September personal consumption expenditures price index along with the core PCE reading that strips out food and energy will be published on Friday and is likely to shape how traders position for the final weeks of the year.

‍

Economists anticipate the core PCE gauge will log a third consecutive 0.2% monthly increase for September. Such a reading would keep the annual rate hovering slightly below 3%, reinforcing the view that inflation is cooling but stubborn enough to remain a focal point for policymakers.

‍

While the data probably won’t derail expectations for a December rate cut, it could influence how Fed Chair Jerome Powell frames the inflation narrative, said Wolf von Rotberg, equity strategist at Bank J Safra Sarasin. If Powell chooses to highlight persistent inflation risks during his press conference, markets may rethink the longer-term path for interest rates in 2026. That shift, von Rotberg noted, could drive additional pressure on longer-dated Treasury yields and weigh on equity valuations.

‍

Tech sentiment, however, found some footing after upbeat news from several major players. Hon Hai Precision Industry Co., a key manufacturing partner for Nvidia Corp., reported strong sales that helped lift optimism across the sector. At the same time, Moore Threads Technology Co. one of China’s leading developers of AI chips surged an eye-catching 425% during its first trading session in Shanghai, signaling robust domestic appetite for advanced semiconductor technologies.

‍

Not every tech story was positive, though. Netflix Inc. dropped more than 4% in premarket action after announcing a partnership with Warner Bros. Discovery Inc. Investors appeared cautious about what the collaboration means for content strategy and cost expectations going forward.

‍

Crypto markets also faced renewed pressure. Despite the broader discussion around institutional adoption, demand for the world’s largest cryptocurrency exchange-traded product has cooled. BlackRock Inc.’s iShares Bitcoin Trust has now logged its longest streak of weekly outflows since it launched in January 2024.

‍

Data shows that investors have withdrawn over $2.7 billion from the ETF in the five weeks leading up to Nov. 28. The redemptions accelerated on Thursday with another $113 million pulled from the fund, putting the product on track for a sixth straight week of net outflows. Bitcoin itself slipped below $91,000 on Friday as selling pressure intensified.

‍

Commodities were mixed, but several markets posted notable moves. Copper climbed to a fresh record high after Citigroup Inc. issued a bullish forecast and traders grew increasingly concerned about a potential supply crunch driven by U.S. stockpiling efforts. The prospect of tighter inventories has added fresh momentum to an already strong rally in industrial metals.

‍

Oil prices saw more muted action, with Brent crude trading near $63 a barrel while investors weighed sluggish demand expectations against geopolitical risks. Meanwhile, gold continued its steady advance and was on pace for a second consecutive daily gain as investors sought out safe-haven exposure in the face of rising bond yields and shifting rate expectations.

‍