U.S. equity futures are pointing to a weaker open on Friday, signaling that stocks could extend Thursday’s modest pullback.
The cautious tone follows fresh economic data releases, including the Federal Reserve’s preferred inflation measure, which came in slightly hotter than expected.
Figures from the Commerce Department showed that the personal consumption expenditures (PCE) price index rose 0.4% in December, compared with a 0.2% gain in November. Economists had forecast a 0.3% increase.
On an annual basis, the headline PCE index climbed 2.9%, up from 2.8% the previous month. Markets had anticipated the yearly rate would remain steady.
Stripping out food and energy, core PCE also advanced 0.4% in December after rising 0.2% in November, exceeding expectations for a 0.3% gain. The annual core reading accelerated to 3.0% from 2.8%, topping the projected 2.9%.
In separate data, the Commerce Department reported that U.S. economic growth cooled more sharply than anticipated in the fourth quarter of 2025.
Gross domestic product expanded at a 1.4% annualized pace in the final quarter of the year, down from 4.4% growth in the third quarter. Economists had expected a slowdown to 2.8%.
The report noted that gains in consumer spending and private investment were partly offset by declines in government expenditures and exports.
On Thursday, stocks broadly moved lower, giving back part of the previous session’s rally. While losses were moderate, all three major indexes closed in negative territory.
The Dow Jones Industrial Average fell 267.50 points, or 0.5%, to 49,395.16. The Nasdaq Composite declined 70.91 points, or 0.3%, to 22,682.73, and the S&P 500 shed 19.42 points, or 0.3%, to 6,861.89.
Weakness was partly driven by Walmart (NYSE:WMT), which dropped 1.4% after issuing a softer-than-expected earnings outlook for the year, despite beating fourth-quarter estimates.
Oil prices also remained elevated amid heightened tensions between the U.S. and Iran, contributing to investor caution.
Market participants appeared hesitant to take bold positions ahead of the inflation release, which could influence the Federal Reserve’s rate trajectory.
Minutes from the Fed’s most recent policy meeting indicated that several officials believe further rate cuts may not be appropriate until there is stronger evidence that inflation is sustainably returning to target.
Sector moves on Thursday were uneven. Airline stocks came under heavy pressure, with the NYSE Arca Airline Index plunging 4.4%.
Housing-related shares also declined, as the Philadelphia Housing Sector Index fell 1.3%.
In contrast, computer hardware stocks outperformed, lifting the NYSE Arca Computer Hardware Index by 3.3%.
Oil services companies also advanced, supported by higher crude prices tied to geopolitical risks in the Middle East.
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