The major U.S. index futures are indicating a preliminary decline on Friday, suggesting that stocks may experience additional downward pressure following a modest decrease in the prior session. The downward momentum observed is a response to unfavorable reactions to significant U.S. economic indicators, particularly the Federal Reserve’s favored measures of consumer price inflation. A report released by the Commerce Department, which garnered significant attention, indicated that consumer prices in the U.S. rose by a margin that exceeded expectations for the month of December. The Commerce Department reported that the personal consumption expenditures price index increased by 0.4 percent in December, following a modest rise of 0.2 percent in November. Analysts had anticipated a 0.3 percent increase in prices. The report indicated that the PCE price index in December increased by 2.9 percent relative to the same month the previous year, marking a rise from 2.8 percent in November. The annual growth rate was anticipated to stay constant.
The core PCE price index, excluding food and energy prices, experienced an increase of 0.4 percent in December, following a rise of 0.2 percent in November. Core prices were anticipated to increase by 0.3 percent. The core PCE price index experienced an annual growth rate increase to 3.0 percent in December, up from 2.8 percent in November. Economists projected that the pace of growth would rise to 2.9 percent. Meanwhile, a separate report released by the Commerce Department indicated that economic growth in the U.S. decelerated significantly more than expected in the fourth quarter of 2025. The report indicated that gross domestic product increased by 1.4 percent in the fourth quarter, following a robust surge of 4.4 percent in the third quarter. Forecasts from economists anticipated a GDP increase of 2.8 percent. The Commerce Department observed that the rise in consumer spending and investment was somewhat counterbalanced by declines in government spending and exports.
Equities experienced a predominantly downward trajectory during Thursday’s trading session, relinquishing some of the gains achieved in the preceding day. The major averages experienced a decline, albeit with selling pressure remaining relatively muted. The major averages concluded the day above their session lows, yet remained in negative territory. The Dow decreased by 267.50 points, representing a decline of 0.5 percent, settling at 49,395.16. The Nasdaq experienced a drop of 70.91 points, or 0.3 percent, to reach 22,682.73, while the S&P 500 fell by 19.42 points, also a 0.3 percent decrease, closing at 6,861.89. The decline observed can be attributed in part to a negative response to earnings announcements from Walmart, which experienced a downturn of 1.4 percent. Walmart’s fourth quarter results surpassed analyst expectations; however, the company has issued earnings guidance for the current year that falls short of projections. Negative sentiment may also have been generated by a sustained increase in the price of crude oil, driven by apprehensions regarding a potential military conflict between the U.S. and Iran.
Nevertheless, market participants appeared hesitant to undertake substantial actions in anticipation of the forthcoming release of key indicators regarding consumer price inflation on Friday. The data may exert considerable influence on the trajectory of interest rates. The minutes from the most recent Federal Reserve monetary policy meeting indicated that several participants believed additional rate cuts might not be justified until there is a definitive sign that the disinflation process is securely on course. Airline stocks experienced a significant decline today, as evidenced by the NYSE Arca Airline Index, which fell by 4.4 percent. Notable fragility was evident in housing stocks, as indicated by the 1.3 percent decline recorded by the Philadelphia Housing Sector Index. Conversely, computer hardware stocks exhibited notable resilience, culminating in a 3.3 percent increase in the NYSE Arca Computer Hardware Index. Oil service stocks exhibited robust performance, driven by a sustained increase in crude oil prices, fueled by apprehensions regarding a possible military confrontation between the U.S. and Iran.