HG MARKETS:

U.S. stock index futures demonstrated a rebound on Friday following a series of recent declines, with market participants shifting their focus toward forthcoming critical inflation data. Dow Jones futures advanced by 255 points, or 0.7%, while S&P 500 futures increased by 45 points, or 0.8%. Nasdaq 100 futures experienced a rise of 210 points, or 1.1%. Despite these gains, both the S&P 500 and the Nasdaq Composite ended the previous trading day in negative territory, whereas the Dow Jones Industrial Average diverged from this trend, exhibiting a modest gain of 0.2%.

Nevertheless, all three major indices are poised to end the week on a down note. The S&P 500 is currently showing a decline of 1.9% for the week, the Nasdaq has fallen nearly 3.1%, and the Dow Jones Industrial Average has slipped approximately 0.9%. The intensified sell-off in the technology sector this week has been fueled by disappointing earnings reports from major tech companies, such as Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:GOOGL). The weak performance of Alphabet could potentially set a concerning precedent for the earnings reports of other internet-based giants.

Additionally, heightened expectations regarding future interest rate cuts have contributed to the sell-off in the technology sector. Investors have responded by securing profits within the tech industry and reallocating capital into equities that are more sensitive to an economic recovery. Later today, the release of the PCE price index—an inflation gauge favored by the Federal Reserve—is anticipated to offer further insights into the future trajectory of interest rates. This data will be critical in shaping the Fed’s stance on monetary policy.

The PCE price index report comes ahead of next week’s Federal Reserve meeting, where the central bank is broadly anticipated to maintain its current interest rate levels. Market observers will be keenly watching for any indications of when the Fed might initiate rate cuts, with a general expectation of a 25 basis point reduction projected for September. Looking ahead to next week, the technology sector will continue to be in the spotlight as major earnings reports are scheduled. Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) are set to release their results on Tuesday and Thursday, respectively. Additionally, earnings reports from Advanced Micro Devices (NASDAQ:AMD), Qualcomm Incorporated (NASDAQ:QCOM), and Amazon (NASDAQ:AMZN) are also expected next week. On Friday, corporate earnings announcements will include reports from companies such as Bristol-Myers Squibb (NYSE:BMY), 3M Company (NYSE:MMM), and Colgate-Palmolive (NYSE:CL).