LIVE MARKETS-US stock futures weaken slightly in wake of PCE, GDP data

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

US STOCK FUTURES WEAKEN SLIGHTLY IN WAKE OF PCE, GDP DATA

U.S. equity index futures are lower after the release of above-estimates PCE price index data and a below-estimates Q4 advance GDP number.

E-mini S&P 500 futures EScv1 are now off around 0.2% versus being just below the flat line prior to the numbers coming out.

The December PCE price index on a month-over-month basis was 0.4% versus a 0.3% estimate. The year-over-year number was 2.9% versus a 2.8% Reuters Poll. The core PCE price index month-over-month came in at 0.4% versus a 0.3% estimate, while the core year-over-year print was 3.0% versus a 2.9% estimate.

December personal income month-over-month was 0.3% as compared to a 0.3% estimate. December adjusted consumption was 0.4% versus a 0.4% estimate.

Q4 advance GDP was 1.4% versus a 3.0% estimate.

According to the CME's FedWatch Tool, the probability that the Fed sits on its hands and leaves its current target rate of 3.50%-3.75% unchanged at its March 17-18 FOMC meeting is unchanged at 94% versus just before the data was released. The chance that the FOMC cuts rates by 25 basis points is around 6%.

Interest rate probabilities are now pricing in a total of 56.3 basis points (bps) of cuts through December 2026 versus 58.3 bps just before the data came out.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.08%. It was around 4.06% just before the data came out. The yield ended Thursday at 4.075%.

A majority of S&P 500 .SPX sector SPDR ETFs are quoted lower in premarket trading. Tech XLK.P, off around 0.7%, is taking the biggest hit. Communication Services XLC.P, up 0.12%, is the leading gainer.

The State Street Regional Banking ETF KRE.P is off about 0.4%.

Regarding the data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

"That was a bummer of a number. Real-time indicators had our hopes high that we’d see something closer to 3%, so 1.4% is a big letdown. Personal income excluding current transfer receipts only rose 0.1% annualized in the fourth quarter, which is nothing to write home about."

Jacobsen added, "Digging into the details, the GDP report isn’t as bad as it first looks. Government spending was a drag with federal spending subtracting 0.9 percentage points from the headline figure."

"Inflation is still too high. Inflation of 2.4% in 2025 isn’t an improvement over the inflation of 2024. The December inflation number was +0.4%, so it’s understandable why some on the Fed are less sanguine about inflation than others. Headline inflation bottomed in April and has been slowly moving higher."

February business activity and consumer sentiment data are due at 9:45 a.m. and 10 a.m. S&P Global's Manufacturing and Services PMIs are expected to come in at 52.6 and 53.0 vs. prior readings of 52.4 and 52.7.

February U Mich final sentiment is expected to be 57.3.

Meanwhile, the U.S. Supreme Court could rule on the legality of President Donald Trump's broad emergency tariffs on Friday. If they are struck down, there is a risk that more than $175 billion in U.S. tariff collections would have to be refunded, according to Penn-Wharton Budget Model economists.

Here is a premarket snapshot from around 8:55 a.m. ET:

(Terence Gabriel, Chuck Mikolajczak)

EARLIER ON LIVE MARKETS:

MACRO CYCLE VS MARKET CYCLE CLICK HERE

IGNORE FUNDAMENTALS, FRENCH BONDS CAN KEEP RALLYING, SOCGEN SAYS, CLICK HERE

GEOPOLITICAL SELLOFFS USUALLY CREATE BUYING OPPORTUNITIES CLICK HERE

STOXX 600 IN THE LAP OF LUXURY CLICK HERE

EUROPE BEFORE THE BELL: FUTURES HIGHER, MARKETS SET FOR POSITIVE WEEK CLICK HERE

TRUMP THREATENS IRAN WITH FORCE CLICK HERE