US pre-open: Futures slip as investors await key inflation gauge

US stock futures were pointing to a negative start on Wall Street on Friday with investors awaiting a key inflation indicator ahead of the opening bell.

The Dow was more or less flat in pre-market trade – having fallen 2.5% over the past three days – while the S&P 500 and Nasdaq were showing losses of around 0.1% and 0.2% respectively.

Analysts at JPMorgan said on Friday that liquidity in US financial markets was starting to dry up, and we've entered a "mildly contracting phase".

“In all, U.S. liquidity or money supply appears to have entered a mildly contracting phase from Q2 2024 onwards, similar to 2022. This follows a rapidly expanding phase from the end of April 2023 to the end of March 2024. In our opinion, this negative delta in the trajectory for U.S. money supply poses a challenge for risk assets going forward," the bank said.

The focus of Friday's session will be firmly on the Federal Reserve's preferred gauge of inflation due out at 0830 EDT. The price deflator for personal consumption expenditures, or PCE, is predicted to have held steady at 2.7% in April, with the core PCE also seen unchanged at 2.8%.

Analyst Patrick Munnelly of TickMill Group said an in-line reading "will likely lead Fed policymakers to maintain that more evidence on inflation trends is needed before considering interest rate cuts".

In corporate news, Dell shares tanked in after-hours trading on Thursday despite the tech group beating both revenue and profit forecasts with its first-quarter results. Pre-market trade was showing the stock down 13%, with some profit taking likely after the shares have more than doubled in price since the start of 2024.

Elsewhere, Nordstrom, Costco, Ulta Beauty, SentinelOne and MongoDB were also falling after releasing their quarterly earnings after the bell on Thursday, while Gap, Zscaler, Ambarella and NetApp all impressed with their results.