Dow futures fall 65 pts; consolidating ahead of crucial Fed meeting

© Reuters.

Investing.com -- U.S. stocks are seen opening marginally lower Friday, consolidating after recent gains as investors hold their breath ahead of next week’s crucial Federal Reserve policy-setting meeting.

At 06:55 ET (10:55 GMT), the Dow futures contract was down 65 points, or 0.2%, S&P 500 futures traded 4 points, or 0.1% lower, and Nasdaq 100 futures dropped 3 points, or 0.1%.

The main Wall Street indices closed positively Thursday, with the broad-based S&P 500 index gaining 0.6% to post its highest close so far this year and on pace for its fourth straight positive week for the first time since last August.

The tech-heavy Nasdaq Composite gained 1% on Thursday, while the blue-chip Dow Jones Industrial Average rose 170 points, or 0.5%.

Cooling labor market to influence the Fed?

Helping the indices to their gains Thursday was the release of data showing a jump in jobless claims to the highest level since October 2021, pointing to a labor market that, while largely resilient, may be starting to show signs of cooling.

This boosted expectations that the Federal Reserve may skip a rate hike next week, even after both the Bank of Canada and the Reserve Bank of Australia unexpectedly hiked interest rates this week, citing sticky inflation.

The major data point awaiting release ahead of the conclusion of the Fed meeting is the consumer price index for May, due on Tuesday. More signs that prices are cooling would likely cement a pause.

China deflation, Trump charge breed caution

While the talk in the U.S. is about inflation still being too high, deflation was more of an issue in China, after the second-largest economy in the world saw annual factory gate prices fall a massive 4.6% in May, the fastest pace in seven years.

Elsewhere, political turmoil could also result in caution among investors after reports that former President Donald Trump has been indicted by a federal grand jury over the mishandling of classified documents.

Coinbase suffers a downgrade by Moody’s

Coinbase Global (NASDAQ:COIN) stock fell over 1% premarket after Moody’s credit rating agency cut its rating of the cryptocurrency exchange to “negative” from “stable”, after U.S. regulators unveiled a lawsuit against the company earlier this week.

Moody’s cited concerns over how the claims could impact the company's "business model and cash flows" for the move.

Oil rises on U.S./Iran nuclear deal denial

Oil prices rose Friday in volatile trading, helped by the denial of a report that the U.S. and Iran were close to a nuclear deal, which would have resulted in Tehran exporting oil to the global market once more in exchange for reducing uranium enrichment.

A spokesperson for the White House National Security Council called the report "false and misleading".

The crude market had earlier sold off on the report and after the release of weak inflation data from China, which raised fears that slowing economic activity at the world’s largest crude importer will hit demand growth this year.

By 06:55 ET, U.S. crude futures traded 0.1% higher at $71.38 a barrel, while the Brent contract climbed 0.2% to $76.08.

Additionally, gold futures traded 0.1% lower to $1,977.75/oz, while EUR/USD traded 0.2% lower at 1.0762.