Futures flat as debt ceiling talk drags on, inflation data in focus

(Reuters) – Wall Street index futures were little changed on Friday as investors refrained from making big bets amid ongoing U.S. debt ceiling talks that appear to have made progress, while also awaiting a key inflation reading.

After multiple rounds of negotiations, President Joe Biden and Congressional Republican Kevin McCarthy reach an agreement to increase the government’s debt limit by $31.4 trillion for two years, while capping spending on most items .

The S&P 500 and Dow Jones Industrial Average are on course for their worst weekly performance in more than two months as debt ceiling talk drags on in Washington even as the June 1 deadline approach.

The Dow has fallen for five consecutive sessions.

Meanwhile, investors await the Commerce Department’s Personal Consumption Expenditure (PCE) Price Index numbers for April, considered the Federal Reserve’s preferred inflation gauge. The reading is scheduled for 8:30 a.m. ET.

Excluding the volatile food and energy components, the PCE price index is expected to have risen 0.3% last month, similar to March.

The numbers will offer clarity on the impact of the Fed’s aggressive tightening campaign on consumer spending as Americans hit by high inflation become increasingly price-sensitive.

Elsewhere, the final May reading from the University of Michigan on consumer sentiment is expected to remain unchanged at 57.7.

As of 5:17 a.m. ET, Dow e-minis were down 54 points, or 0.16%, S&P 500 e-minis were down 6 points, or 0.14%, and Nasdaq 100 e-minis were up 3 points, or 0.02%.

Among the frontrunners, Ford Motor Co gained 1.0% as it gave its electric vehicle owners access to more than 12,000 Tesla Inc superchargers in North America in early 2024. Tesla shares rose 0, 5%.

Clothing retailer Gap Inc jumped 11.7% in premarket trading after reporting a surprise first-quarter profit on Thursday.

Chipmaker Marvell Technology Inc jumped 15.8% after forecasting its annual artificial intelligence (AI) revenue would double.

It comes just as shares of the world’s most valuable chipmaker, Nvidia Corp, hit a record high on Thursday following its exceptional forecast. Nvidia shares were down 0.3% in premarket trading.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Vinay Dwivedi)

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