Futures Pull Back After Record Highs

U.S. stock futures slipped slightly on Friday, consolidating after Wall Street’s latest record-breaking session. At 05:40 ET (09:40 GMT), Dow Jones Futures fell 78 points (-0.2%), S&P 500 Futures dropped 8 points (-0.1%), and Nasdaq 100 Futures lost 10 points (-0.1%).

On Thursday, all three major indices hit fresh peaks. The Dow Jones Industrial Average closed above 46,000 for the first time, while the S&P 500 and Nasdaq Composite added 0.9% and 0.7%, respectively. Week-to-date, the S&P 500 is up 1.6%, heading for its best weekly performance since early August, with both the Nasdaq and Dow also poised for positive finishes.

Fed Rate Cut Bets Cemented

Traders remain confident that the Federal Reserve will cut interest rates at its September 16–17 meeting. Data on Thursday showed consumer prices rose 0.4% month-on-month in August, pushing annual inflation to 2.9%—the highest in seven months.

While inflation came in slightly stronger than expected, labor market weakness kept expectations of easing intact. Weekly jobless claims surged to 263,000, the highest since 2021, reinforcing concerns about rising layoffs after a soft nonfarm payrolls report last week.

Markets are fully pricing in a 25 basis point rate cut, with slim odds of a larger 50 bps move, according to CME FedWatch. The University of Michigan’s consumer sentiment and inflation expectations survey later Friday will provide further insight into how households view price trends.

Corporate Developments

Earnings and corporate headlines also shaped sentiment:

• Adobe Systems lifted its annual forecasts, citing strong demand for AI-enhanced design tools.
• Luxury furniture maker RH reported a quarterly revenue miss, disappointing investors.
• Super Micro Computer announced volume shipments of its Nvidia Blackwell Ultra servers.
• Microsoft and OpenAI confirmed a non-binding agreement on OpenAI’s transition to a for-profit structure.
• Several IPOs are set to debut Friday, including Gemini Space Station (crypto exchange), Black Rock Coffee Bar, Via Transportation, and Legence.

Outlook

Despite lingering concerns over sticky inflation, the weakening labor market has shifted investor focus squarely onto growth risks, with expectations that the Fed will prioritize employment in its policy decision next week. Markets will closely track the Michigan survey later today and inflation expectations to gauge whether consumer sentiment aligns with the broader easing narrative.