US pre-open: Futures trade lower ahead of core PCE reading

Wall Street futures were in the red ahead of the bell on Thursday as investors awaited the release of January's all-important core PCE figures.

As of 1255 GMT, Dow Jones futures were down 0.33%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.30% and 0.29% weaker, respectively.

The Dow closed 23.39 points lower on Wednesday after the Department of Commerce said gross domestic product had grown at a quarterly annualised rate of 3.2% over the three months ended 31 December, slightly below preliminary estimates for a reading of 3.3%.

Thursday's primary focus will be on last month's core PCE reading, due out at 1330 GMT, with economists expecting to see a 0.3% month-on-month increase and 2.4% year-on-year growth in the Fed's preferred inflation gauge.

Trade Nation's David Morrison said: "US stock indices ended yesterday's session modestly lower and they have continued to drift down this morning. Having pushed all the major indices to fresh record highs last Thursday, following Nvidia's blow-out earnings report, investors are sitting on their hands while they wait for the next catalyst to move markets. That could come as early as today, with the much-anticipated release of the Fed's preferred inflation measure.

"Could we have another 'Nvidia-style' event today? Investors are wary that core PCE could tick back above 3%, potentially pushing out the date of the first Fed rate cut, or even raising speculation of a rate hike. But if the data came in below expectations, this could trigger another burst of bullish sentiment and a fresh round of equity purchases. Yesterday we heard from several FOMC members. All said that the pace of rate cuts would depend on upcoming economic data, and all suggested that the first rate cut would be sometime this year, with the June meeting the earliest possibility. It’s interesting that no one talked down rate cuts to the extent of warning of the possibility of a rate hike first."

Elsewhere on the macro front, weekly jobless claims data will be out at 1330 GMT, while the Chicago purchasing managers' index was slated for release at 1445 GMT, pending home sales will follow at 1500 GMT, and the Kansas Fed's manufacturing index was due for publication at 1600 GMT.

In the corporate space, Salesforce traded slightly softer in pre-marked on the back of weak revenue guidance, while Snowflake was sharply lower after issuing its own disappointing product revenue guidance.

Best Buy and Hewlett-Packard were also due to report their latest quarterly earnings on Thursday.

Reporting by Iain Gilbert at Sharecast.com