U.S. Stocks May See Continued Strength Following Inflation Data

After moving notably higher over the two previous sessions, stocks may see further upside in early trading on Friday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.

The upward momentum on Wall Street comes following the release of a report from the Commerce Department showing an unexpected slowdown in the annual rate of growth by core consumer prices in the U.S.

The report said core consumer prices, which exclude food and energy prices, jumped 4.6 percent year-over-year in February.

Annual price growth remains elevated, but this represents a slowdown from the 4.7 percent year-over-year spike in January. Economists had expected the pace of growth to be unchanged.

With the inflation reading said to be preferred by the Federal Reserve, the data may lead to optimism the central bank will hold off on raising interest rates at its next meeting in early May.

CME Group’s FedWatch Tool is currently indicating a 49.2 percent chance the Fed will leave rates unchanged and a 50.8 percent chance of a 25 basis point rate hike.

The Fed signaled last week that it expects just one more rate increase this year, leaving traders looking for clues about the timing of the final rate hike.

Just after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of March.

The Chicago business barometer is expected to edge down to 43.4 in March from 43.6 in February, with a reading below 50 indicating a contraction.

The University of Michigan is also due to release its revised reading on consumer sentiment in the month of March. The consumer sentiment index is expected to be downwardly revised to 63.2 from 63.4, which was down from 67.0 in February.

Stocks moved mostly higher during trading on Thursday, adding to the strong gains posted in Wednesday’s session. With the continued upward move, the Nasdaq and the S&P 500 reached their best closing levels in over a month.

The major averages gave back ground after an early advance but moved back to the upside as the day progressed. The Nasdaq advanced 87.24 points or 0.7 percent to 12,013.47, the S&P 500 climbed 23.02 points or 0.6 percent to 4,050.83 and the Dow rose 141.43 points or 0.4 percent to 32,859.03.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index jumped by 0.9 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has increased by 0.6 percent, the German DAX Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.4 percent.

In commodities trading, crude oil futures are rising $0.52 to $74.89 a barrel after jumping $1.40 to $74.37 a barrel on Thursday. Meanwhile, after climbing $13.20 to $1,997.70 an ounce in the previous session, gold futures are inching up $6.20 to $2,003.90 an ounce.

On the currency front, the U.S. dollar is trading at 132.92 yen versus the 132.70 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0886 compared to yesterday’s $1.0905.