By Devik Jain
(Reuters) – U.S. stock index futures edged higher on Friday ahead of an inflation report that could likely strengthened the case for an aggressive policy tightening by the Federal Reserve, while Oracle Corp jumped on an upbeat third-quarter outlook.
Shares of the enterprise software maker gained 11.2% in premarket trading after posting forecast-beating results for the second quarter, helped by higher technology spending from businesses looking to support hybrid work.
The Labor Department’s data, due at 8:30 a.m. ET, is expected to show U.S. consumer prices rose to 6.8% in November, compared with a year ago, in what would be its highest level since 1982 as the cost of goods and services rose broadly amid supply constraints.
Any upside surprise on the reading will likely bolster the case for a faster tapering of bond purchases and bring forward expectations for interest rate hikes ahead of the U.S. central bank’s policy meeting next week.
A Reuters poll of economists predicted the Fed would raise rates by 25 basis points to 0.25-0.50% in the third quarter of next year, followed by another in the fourth quarter. However, most saw the risk that a hike comes even sooner.
The S&P 500 index dropped 5.2% from a record high hit on Nov. 22 as investors digested Jerome Powell’s renomination as the Fed’s chair, his hawkish commentary to tackle surging price pressures and the discovery of the Omicron coronavirus variant.
However, a positive update by Pfizer and BioNTech’s on their vaccine offering some protection against the latest variant helped equities regain some ground.
So far this week, the Nasdaq and the S&P advanced over 2.8% each and the Dow rallied 3.4%. The S&P is now down 1.6% from its all-time peak.
At 6:38 a.m. ET, Dow e-minis were up 101 points, or 0.28%, S&P 500 e-minis were up 18.25 points, or 0.39%, and Nasdaq 100 e-minis were up 64.5 points, or 0.4%.
Broadcom Inc rose 7.0% as the semiconductor firm sees first-quarter revenue above Wall Street expectations and announced a $10 billion share buyback plan.
Meanwhile, the U.S. Senate on Thursday passed and sent to President Joe Biden the first of two bills needed to raise the federal government’s $28.9 trillion debt limit and avert an unprecedented default.
(Reporting by Devik Jain in Bengaluru; Editing by Maju Samuel)
