Editor’s Note: The future prices of benchmark tracking ETFs, the lede, and the latest economic releases were updated in the story.
U.S. stock futures dropped on Friday following Thursday’s positive moves. Futures of major benchmark indices were trading lower.
Investors are eyeing a fresh cue for the direction on interest rate cuts in September, just ahead of a truncated week due to Labor Day, falling on Monday, Sept. 1.
The Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index for July, increased 0.2% as compared to June. From the same month one year ago, the PCE price index for July increased 2.6%.
Consumer spending rose 0.5% from the prior month, which was met with persistent inflation and a ballooning trade deficit.
Adding to potential headwinds, the nation’s goods trade deficit expanded sharply to $103.6 billion, even as both retail and wholesale inventories ticked up by a modest 0.2%.
Meanwhile, the latest in President Donald Trump‘s attempt to oust Lisa Cook from the Federal Reserve showed that the Federal Housing Finance Agency Director Bill Pulte filed a second criminal referral against her.
The new allegations relate to a property Cook owns in Cambridge, Massachusetts, and her government ethics filings about various real estate holdings.
The 10-year Treasury bond yielded 4.23% and the two-year bond was at 3.63%. The CME Group's FedWatch tool‘s projections show markets pricing an 85.2% likelihood of the Federal Reserve cutting the current interest rates for the Sept. 17 decision.
| Futures | Change (+/-) |
| Dow Jones | -0.38% |
| S&P 500 | -0.41% |
| Nasdaq 100 | -0.62% |
| Russell 2000 | -0.38% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, fell in premarket on Friday. The SPY was down 0.23% at $647.43, while the QQQ declined 0.41% to $574.70, according to Benzinga Pro data.
Cues From Last Session
Most sectors on the S&P 500 closed on a positive note, with energy, information technology, and communication services stocks recording the biggest gains on Thursday.
However, utilities and consumer staples stocks bucked the overall market trend, closing the session lower.
This performance helped U.S. stocks settle higher, as the Nasdaq Composite gained more than 100 points during the session and the S&P 500 hit another all-time closing high. Meanwhile, Dow Jones ended at a new record close.
Positive market drivers included an upward revision of U.S. GDP growth for the second quarter to 3.3%, a sharp rebound from the first quarter’s 0.5% contraction.
Dollar General Corp. (NYSE:DG) also reported better-than-expected second-quarter results and raised its FY2025 guidance, while Nvidia Corp. reported upbeat earnings.
The Dow Jones index ended 72 points or 0.16% higher at 45,636.90, whereas the S&P 500 index rose 0.32% to 6,501.86. Nasdaq Composite advanced 0.53% to 21,705.16, and the small-cap gauge, Russell 2000, gained 0.19% to end at 2,378.41.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.53% | 21,705.16 |
| S&P 500 | 0.32% | 6,501.86 |
| Dow Jones | 0.16% | 45,636.90 |
| Russell 2000 | 0.19% | 2,378.41 |
Insights From Analysts
The S&P 500 charged to record highs, closing decisively above the 6,500 mark on Thursday. But as investors celebrate the rally, a historically challenging month looms.
According to analysis from Adam Turnquist, Chief Technical Strategist at LPL Research, seasonal trends paint a cautionary picture for the coming weeks.
“September is the worst month for stocks,” Turnquist notes in a recent commentary. The data, stretching back 75 years, is stark: the S&P 500 has posted an average return of -0.7% in September and has finished the month with positive returns only 44% of the time, the lowest rate of any month.
However, the report highlights a critical exception to this historical weakness. The market's current trend could be a deciding factor. “When accounting for momentum and trend… September doesn't look so bad,” Turnquist explains. When the S&P 500 enters September above its 200-day moving average, as it is now, the average return flips to a positive 1.3%, with a 60% positivity rate.
Compounding the seasonal challenge is volatility, which tends to spike in the fall. Analysts note the CBOE Volatility Index (VIX) is near year-to-date lows but historically reaches its high-water mark in late September or October. While the current market momentum provides a strong tailwind, investors are weighing it against September’s formidable reputation as a month of market turbulence.
Meanwhile, the new tariffs could be a surprising solution to the U.S.’s ballooning debt problem, presenting a net benefit to the U.S. Treasury market, according to a new analysis.
In a note addressing the nation’s nearly $2 trillion annual budget deficit, Lawrence Gillum, Chief Fixed Income Strategist for LPL Financial, argues that increased tariff revenue creates an “ideal scenario for existing Treasury holders.”
The core of the argument is that tariffs provide a direct, alternative income stream to the federal government, reducing its borrowing needs. Gillum notes that with tariff collection expected to decrease deficits by $4 trillion over 10 years, the Treasury Department can scale back its bond issuance.
“Every dollar collected through tariffs is potentially one less dollar the government needs to borrow,” Gillum writes. This reduced supply of new bonds tends to support prices and contain yields.
Simultaneously, Gillum explains, tariffs increase costs for businesses and consumers, which is likely to slow economic growth—a fundamental factor that has historically benefited Treasuries as investors seek safe-haven assets.
This combination of lower supply and potentially higher demand creates a powerful tailwind for the bond market.
While acknowledging that tariffs add inflationary pressure, Gillum points out that rating agency S&P Global Ratings has already deemed the policy “credit-positive,” suggesting the fiscal benefits outweigh near-term growth concerns. While not a replacement for income taxes, Gillum concludes, “it helps.”
See Also: How to Trade Futures
Upcoming Economic Data
Here's what investors will be keeping an eye on Friday;
- In July, the personal income increased by 0.4%, personal spending increased by 0.5%, the headline PCE Price Index increased by 0.2% and the core PCE Price Index (excluding food and energy) increased by 0.3%, as compared to June
- In July, the U.S. goods trade deficit widened by $18.7 billion, while advanced retail inventories increased by 0.2% and advanced wholesale inventories also rose by 0.2%, as compared to June.
- August’s Chicago Business Barometer (PMI) will be out by 9:45 a.m., and final consumer sentiment data will be released by 10:00 a.m. ET.
Stocks In Focus
- Alibaba Group Holding Ltd. ADR (NYSE:BABA) fell 0.56$ in premarket on Friday as it is expected to report earnings before the opening bell. Analysts estimate earnings of $1.95 per share on revenue of $34.26 billion.
- BRP Inc. (NASDAQ:DOOO) rose 2.63% as analysts expect it to report earnings of 33 cents per share on revenue of $1.31 billion before the opening bell.
- Dell Technologies Inc. (NYSE:DELL) dropped 6.19% as it anticipates third-quarter adjusted earnings of $2.45 per share, versus estimates of $2.55 per share.
- Marvell Technology Inc. (NASDAQ:MRVL) declined 12.90% after reporting a revenue miss but an earnings beat in the second quarter.
- Ulta Beauty Inc. (NASDAQ:ULTA) advanced 3.56% after reporting upbeat financial results for the second quarter and raising its fiscal year 2025 guidance.
- Autodesk Inc. (NASDAQ:ADSK) jumped 9.21% as it raised its full-year guidance from a range of $6.92 billion to $7 billion to a new range of $7.03 billion to $7.08 billion, versus estimates of $6.97 billion.
- Australian Oilseeds Holdings Ltd. (NASDAQ:COOT) jumped 28.56% after receiving a crucial extension from NASDAQ to maintain its listing status.
- Movano Inc. (NASDAQ:MOVE) surged 59.91% following the company's announcement that NASDAQ granted an extension to maintain its exchange listing.
Commodities, Gold, And Global Equity Markets
Crude oil futures were trading lower in the early New York session by 0.46% to hover around $64.29 per barrel.
Gold Spot US Dollar fell 0.22% to hover around $3,410.93 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was 0.07% higher at the 97.8770 level.
Asian markets ended mixed on Friday, as India’s S&P BSE Sensex, Hong Kong's Hang Seng, and China’s CSI 300 indices rose. While Australia's ASX 200, Japan's Nikkei 225, and South Korea's Kospi indices fell. European markets were trading lower in early trade.
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