US pre-open: Futures mostly lower ahead of CPI reading

Wall Street futures were pointing to a mixed open ahead of the bell on Friday ahead of some hotly-anticipated inflation data scheduled for release later in the day.

As of 1215 BST, Dow Jones and S&P 500 futures were down 0.28% and 0.18%, respectively, while Nasdaq-100 futures had the index opening 0.04% firmer.

The Dow closed 638.11 points lower on Thursday, extending losses recorded in the previous session.

Friday's primary focus will be the May consumer price index report, with economists expecting a year-on-year increase of 8.3% for the main index and 5.9% for the core index, which excludes food and energy prices, potentially indicating that inflation may have peaked and that the Federal Reserve may need to be slightly less aggressive as the year progresses.

AvaTrade's Naeem Aslam said: "Today is the most important day for market players as today we are going to get the US Consumer Price Index CPI data. It is highly likely that the US and European stock futures will remain quite ahead of this important economic reading.

"Speculators are hoping that we may get the US inflation reading showing that it has reached its peak, and if that becomes a reality, it could bring a relief rally for the US stock market. This is because traders and investors will not anticipate any further hawkish stance from the Fed, and the most likely scenario will be that the Fed's monetary policy will remain on autopilot.

"However, if the inflation reading shows that the number has yet to reach its optimal level, a scenario which we believe is highly likely as oil prices are likely to soar further, then we could see more panic in the stock market. Traders are likely to favour a risk-off rally because they will believe that the Fed is still behind the curve, and in order to play to catch up with inflation, they are most likely to send even more hawkish monetary policy messages to the markets."

Also on the macro front, a preliminary reading of the University of Michigan's May consumer sentiment index will be released at 1500 BST and last month's Federal Government budget statement will be published at 1900 BST.

No major corporate earnings were slated for release on Friday.

Reporting by Iain Gilbert at Sharecast.com