US stock futures rise after Wall St rallies on softer inflation data

U.S. stock index futures were higher on Sunday evening as Wall Street took some relief from softer inflation data, although investors were still bracing for a slower pace of interest rate cuts in the coming year.

The Federal Reserve projected fewer-than-expected cuts in 2025 last week, which had sparked deep losses in Wall Street indexes for two consecutive days and also spurred weekly losses.

S&P 500 Futures rose 0.3% to 6,020.50 points, while Nasdaq 100 Futures gained 0.4% to 21,655.25 points by 18:40 ET (23:38 GMT). Dow Jones Futures were 0.3% higher at 43,425.0 points. Investors assess PCE data, Fed comments for rate outlook

PCE price index data—a key inflation gauge favored by the Federal Reserve—rose 0.1% in November, a slower pace from October's 0.2% increase. This brought the annual PCE inflation rate to 2.4%, slightly below estimates of 2.5%.

Although the recent data indicated some cooling in inflation, it still remained above the Fed's 2% annual target, indicating that overall inflation still remained sticky.

The Fed signaled a cautious approach to monetary policy adjustments, emphasizing the need for continued progress on inflation before considering further rate cuts.

Comments from Fed officials on Friday showed that some policymakers were starting to factor in fiscal policy uncertainty, such as tariffs, in their outlooks.

Fed officials reiterated that they were still uncertain about how the new Donald Trump administration policies would affect the interest rate outlook, with some saying it was the very same uncertainty that led them to forecast fewer cuts in 2025.

The Fed cut rates by 25 basis points on Wednesday but forecast just two rate cuts in 2025, compared with a prior forecast of four cuts. Wall Street rallies after two-day slump, tech rebounds

Wall Street indexes rebounded on Friday but ended lower for the week as prospects of rates remaining higher for longer sent Wall Street indexes sharply lower on Wednesday and Thursday.

Technology stocks, which fell sharply after the Fed’s decision, gained some of the ground on Friday with a broader rally on Wall Street.

NVIDIA Corporation (NASDAQ:NVDA ) stock jumped 3.1%, while Micron Technology Inc (NASDAQ:MU ) shares climbed 3.5%.

Broadcom Inc (NASDAQ:AVGO ) shares rose 1.1% on Friday, while Intel Corporation (NASDAQ:INTC ) gained 2.4%.

On the other hand, Tesla Inc (NASDAQ:TSLA ) slumped nearly 3.5%.

On Friday, the S&P 500 gained 1.1% to 5,930.90 points, and the Dow Jones Industrial Average rose 1.2% to 42,841.06, while the NASDAQ Composite climbed 1% to 19,572.60 points.

For the week, the S&P 500 fell nearly 2%, while the Nasdaq declined 1.8%. The Dow recorded a 2.3% weekly fall.

Source: Investing.com