Wall Street was down modestly early Friday, but remains on track to close the first week of earnings season with gains ahead of a new batch of inflation data from the U.S. government.
S&P 500 and Dow Jones industrial futures each fell less than 0.1% before the bell.
Intel fell more than 10% in premarket trading, dragging down the entire chipmaking sector with it after issuing a weak first-quarter forecast. Intel said it expects to earn an adjusted 13 cents per share in the first quarter of 2024, well below the 21 cents per share Wall Street expected. The California company's sales forecasts were also lower than expected.
Markets have been buoyed recently by strong economic data that, along with receding inflation, make it look increasingly likely that the United States can achieve a so-called "soft landing": controlling inflation without causing the economy to fall into recession.
The US economy grew at an annual rate of 3.3% in the last three months of 2023, according to an initial estimate by the United States government on Thursday. According to FactSet, that figure was much stronger than the 1.8% growth economists were expecting. Such a resilient economy should boost corporate profits, which are one of the main inputs that set stock prices.
The report also encouragingly confirmed that inflation continued to moderate into late 2023. Hopes are high that inflation will have cooled enough from its peak two summers ago for the Federal Reserve to begin cutting interest rates this year. That, in turn, would ease pressure on financial markets and boost investment prices.
The Commerce Department will release the monthly U.S. consumer spending report, which includes the Federal Reserve's preferred measure of inflation. It is the last major inflation report before the Federal Reserve's policy meeting next week, where most economists expect the central bank to leave its benchmark interest rate unchanged for the fourth straight time.
Tokyo's Nikkei 225 fell 1.3% to finish at 35,751.07 as a key measure of inflation slowed faster than expected in January, to 1.6% from 2.4% in December . The weaker price gains ease pressure on the Bank of Japan to tighten its ultra-loose monetary policy, which has pumped huge amounts of cash into markets. The central bank targets inflation of 2%.
โThe BOJ will wait to assess the underlying inflation trend over the coming months. We expect inflation to rebound above 2% in February,โ Robert Carnell, regional head of Asia-Pacific research at ING, said in a report.
Chinese markets ended a winning streak following a series of measures taken by the government to support stock prices and the real estate sector.
Hong Kong's Hang Seng fell 1.6% to 15,952.23, while the Shanghai Composite was little changed, up 0.1% at 2,910.22.
South Korea's Kospi rose 0.3% to 2,478.56. Markets were closed in Australia for a national holiday.
France's CAC 40 rose 2.3% and Britain's FTSE 100 added 1.6%. Germany's DAX rose a modest 0.3%.
In energy trading, benchmark U.S. crude fell 72 cents to $76.64 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 63 cents to $81.33 a barrel.
In currency trading, the US dollar slowly rose to 147.79 Japanese yen from 147.64 yen. The euro cost $1.0872, down from $1.0848.
On Wall Street on Thursday, the S&P 500 added 0.4% to 4,894.16 and set a record for the fifth consecutive day. The Dow Jones Industrial Average rose 0.6% and the Nasdaq composite gained 0.2%.
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