US equity futures traded higher on Friday as markets awaited August consumer inflation figures that could influence expectations ahead of next week’s Federal Reserve policy meeting.
At 02:57 ET (06:57 GMT), Dow futures rose 232 points, or 0.5%, while S&P 500 futures increased 33 points, or 0.4%. Nasdaq 100 futures were up 120 points, also representing a 0.4% gain.
The moves followed a fourth consecutive decline for the S&P 500 on Thursday. Deutsche Bank analysts pointed to pressure in government bond markets, describing the session as “another terrible day for bonds.”
The US 10-year Treasury yield continued moving towards 5% as investors considered whether higher oil prices could contribute to inflation and affect the interest-rate outlook. The European Central Bank raised borrowing costs on Thursday, while money markets were pricing in further increases over the next year.
“The combination of higher energy prices and a hawkish ECB put fresh pressure on sovereign bonds across the board,” Deutsche Bank analysts said.
August US Inflation Report Awaited
Economists expect headline US consumer prices to have increased 0.4% in August from July, accelerating from the previous monthly rise of 0.1%. Annual inflation is forecast to remain at 3.4%.
Core CPI, which excludes food and energy, is expected to rise 0.2% month on month and 2.4% from a year earlier. The corresponding July figures were 0.2% and 2.5%.
The report comes ahead of the Federal Reserve’s two-day meeting next week. Thursday’s data also showed faster increases in several price components used in the personal consumption expenditures price index, another measure of inflation monitored by the Fed.
Brent Trades Above $100 Amid Middle East Developments
Brent crude futures declined on Friday but remained above $100 per barrel as investors continued to monitor shipping conditions in the Middle East.
“Once again, it is geopolitical fears driving everything,” Deutsche Bank analysts said.
Iran-backed Houthi forces in Yemen captured a port city on Thursday, adding to concerns about shipping around the Bab el-Mandeb Strait between the Red Sea and Gulf of Aden.
Shipping data cited by Reuters showed seven vessel transits through the Strait of Hormuz on Thursday, compared with a 10-day moving average of 15.
Brent subsequently moved lower after the Financial Times reported that Gulf foreign ministers and Iranian authorities were discussing a temporary arrangement concerning shipping through the Strait of Hormuz.
Oracle Reports More Than $30 Billion in New AI Cloud Contracts
Oracle (NYSE:ORCL) reported quarterly earnings and revenue above analyst forecasts and raised its full-year profit guidance.
The company, which operates cloud infrastructure alongside its database software and enterprise applications businesses, reported further contracting activity related to artificial intelligence.
“Customer demand for AI Cloud Training and Inferencing Services continues to grow faster than supply,” Oracle said in a statement.
Oracle recorded more than $30 billion of additional AI cloud contracts during the quarter. Remaining performance obligations increased to $664 billion.
The company said most of the revenue covered by the new contracts would not require substantial semiconductor expenditure and maintained its annual spending target of $90 billion to $95 billion.
Oracle shares rose in extended-hours trading after the results.
Adobe Q3 Revenue Reaches $6.76 Billion
Adobe (NASDAQ:ADBE) reported third-quarter adjusted earnings of $6.13 per share, compared with an analyst consensus of $6.07.
Quarterly revenue was $6.76 billion, above the $6.69 billion consensus estimate.
Adobe forecast fourth-quarter revenue of $6.80 billion to $6.85 billion. The midpoint of $6.825 billion compares with an analyst consensus of $6.85 billion.
The company expects fourth-quarter adjusted earnings of $6.30 to $6.35 per share. Adobe shares declined in extended-hours trading following the results.
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