(Reuters) -U.S. stock index futures climbed on Friday, putting the S&P 500 and the Nasdaq on track for record highs, as investors awaited a key inflation reading amid growing expectations of a dovish monetary policy from the Federal Reserve this year.
Personal Consumption Expenditure data – the U.S. central bank’s preferred inflation gauge – for May is due to be released at 08:30 a.m. ET and will be scrutinized for a better understanding of the Fed’s interest-rate path as President Donald Trump’s tariffs weigh on prices.
As the ceasefire in the Middle East holds, investor focus has turned to the prospect of a dovish Fed after the Wall Street Journal reported that Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell’s replacement by September or October.
A spate of economic data this week, including a weaker-than-expected first quarter GDP reading as well as jobless claims reaching multi-year highs, has supported the case for the Fed to cut borrowing costs this year.
Traders now price in a 20% chance of a rate cut in July, compared with 12.5% last week, according to CME Group’s FedWatch tool.
At 05:25 a.m. ET, Dow E-minis were up 103 points, or 0.24%, S&P 500 E-minis were up 15 points, or 0.24%, and Nasdaq 100 E-minis were up 70.25 points, or 0.31%
Nike’s shares rose 9.6% in premarket trading after the retailer forecast a smaller-than-expected drop in first-quarter revenue.
Retailer Lululemon Athletica rose 1.7% after Nike’s results.
The benchmark S&P 500 and the Nasdaq are on track for their best weekly performance in six weeks while the blue-chip Dow is set for a weekly advance, if gains hold.
Adding to the upbeat mood, Washington reached an agreement with China on expediting rare earth shipments to the United States, a White House official said, days ahead of the July 9 deadline for Trump’s “reciprocal” tariffs.
Also on tap is the final reading of consumer sentiment for June, measured by the University of Michigan Surveys of Consumers, due at 10:00 a.m. ET.
Remarks from New York Fed President John Williams, Cleveland Fed President Beth Hammack and Fed Board Governor Lisa Cook are expected later in the day.
(Reporting by Kanchana Chakravarty in Bengaluru; Editing by Pooja Desai)
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