US pre-open: Stocks to edge lower ahead of inflation data

US stocks looked set to edge lower at the open on Friday as investors eyed the latest reading on inflation.

At 1230 GMT, Dow Jones Industrial Average futures were down 0.2%, while S&P 500 and Nasdaq futures were 0.3% lower.

Trade relations between the US and China were still very much in focus after Treasury Secretary Steve Mnuchin said that China’s lead trade official, Vice Premier Liu He, would "most likely" head over to the US for further trade talks later this month.

"The current intent is that the Vice Premier Liu He will most likely come and visit us later in the month and I would expect the government shutdown would have no impact," Mnuchin told reporters on Thursday. "We will continue with those meetings just as we sent a delegation to China."

"That comment appears to have renewed hopes that the recent get-together in Beijing, though not producing any concrete progress just yet, was nevertheless a step towards an eventual trade war resolution," said Spreadex analyst Connor Campbell.

Also on Thursday, Federal Reserve chairman Jerome Powell said at the economic Club of Washington that the Fed was ready to wait before hiking rates again. Powell also said that the US central bank's balance sheet will be "substantially smaller" than it is now, "but nowhere near where it was before".

Russ Mould, investment director at AJ Bell, said: "Although financial markets are breathing a sigh of relief that the US Federal Reserve now seems less aggressive on interest rates, after nine increases since late 2015, they may be less pleased with chair Jay Powell’s comments in Washington yesterday that it is still the plan to make the central bank’s balance sheet ‘substantially smaller’ over time.

"This means that the Fed will continue to tighten monetary policy and drain away some of the cheap money which, it could be argued, has done so much to fuel prices across shares, bonds and a range of other asset classes over the last decade."

In corporate news, Activision Blizzard was down 6.2% in pre-market trade after the video game company announced late on Thursday that it was transferring publishing rights for its Destiny franchise to Bungie. This will mean that Activision will not include revenue or operating income from the franchise this year.

Elsewhere, American Airlines was likely to be in focus after it downgraded its profit estimate for 2018 on Thursday and cautioned that it will struggle to increase revenues towards the end of the year.

Shares in tech giant Apple could be active after the Wall Street Journal said it was planning three new iPhone models this year, including a device to succeed the newly-created XR model.

On the data front, the consumer price index for December is due at 1330 GMT. The year-on-year headline reading is expected at 1.9% versus a prior reading of 2.2% while consensus is for the core measure to be unchanged at 2.2%.