By Peter Nurse
Investing.com -- U.S. stocks are seen opening lower Friday, heading towards another losing week on concerns about future economic growth, exacerbated by an earnings warning from delivery giant FedEx.
At 07:00 ET (11:00 GMT), the Dow Futures contract was down 190 points, or 0.6%, S&P 500 Futures traded 27 points, or 0.7%, lower and Nasdaq 100 Futures dropped 100 points, or 0.8%.
The major equity averages closed lower Thursday, heading for their fourth losing week in five, with the tech-heavy Nasdaq Composite leading the way, on course to drop 4.6% this week, its worst weekly drop since June. The broad-based S&P 500 is down 4.1% so far this week, while the blue chip Dow Jones Industrial Average is so far set to drop 3.7%.
This latest bout of weakness comes as inflation for August proved to be hotter than forecast, something that could give the Federal Reserve reason to continue on its aggressive monetary tightening path, to the likely detriment of future economic activity.
The Fed is widely expected to raise its benchmark rate another 0.75 percentage point next week, as it did in June and July, but the possibility of a full 100 basis point hike has increased since Tuesday’s CPI release.
Adding to the negative sentiment was the news that FedEx (NYSE:FDX), an industry bellwether, reported disappointing first-quarter numbers and withdrew the financial forecast it issued just three months ago, citing slowing global demand. Its stock slumped 19% premarket.
Gap (NYSE:GPS) could also be in focus after Kanye West moved to terminate the partnership between his company Yeezy and the apparel chain, saying it failed to meet its obligations under the contract.
On the economic front, the Michigan consumer sentiment reading for September comes out at 10:00 ET (14:00 GMT), and is expected to come in at 60, which would be up from 58.2 in the prior reading.
Oil prices edged higher Friday, rebounding after the previous session’s hefty losses, but were headed for a third straight week of losses on fears that aggressive monetary tightening will hit global growth and thus fuel demand.
The crude market has also been hit by a strong U.S. dollar in the wake of the hot U.S. inflation data, which makes oil more expensive for buyers using other currencies.
By 07:00 ET (11:00 GMT), U.S. crude futures traded 0.5% higher at $85.47 a barrel, while the Brent contract rose 0.7% to $91.45. Both contracts tumbled around 4% on Thursday, and were set to lose nearly 2% for the week.
Additionally, gold futures fell 0.2% to $1,674.75/oz, while EUR/USD traded 0.1% lower at 0.9987.