Nasdaq, S&P, Dow futures in green ahead of inflation report (SPX)

Stock index futures were higher on Friday, as traders look forward to the key inflation data slated to come later in the day.

S&P 500 futures (SPX) +0.5%, Nasdaq 100 futures (US100:IND) +0.7% and Dow futures (INDU) +0.2%.

The 10-year Treasury yield (US10Y) was unchanged at 3.86%. The 2-year yield (US2Y) was flat at 3.91%.

U.S. stocks on Thursday ended mixed, as an afternoon bout of selling ate into strong gains earlier, after a post-earnings drop in chip giant Nvidia (NVDA) intensified through the session and offset a boost to sentiment from data that showed a more robust expansion in the economy in the second quarter than previously estimated.

“Risk assets put in a decent performance over the last 24 hours, as solid US data outweighed investors’ disappointment about Nvidia’s latest results,” Deutsche Bank’s Henry Allen said.

“With all that data in hand, the general perception was that the economy was doing better than thought, and that a larger 50bp cut from the Federal Reserve was now less likely,” Allen said.

Investors are now bracing for the July core personal consumption expenditure price index report, which will land before the bell.

The Fed’s favored inflation gauge is expected to show a 0.2% M/M increase in July, the same growth rate as in June. On a Y/Y basis, that’s expected to be 2.7%, up a tick from 2.6% in June. Core PCE strips out food and energy prices, which can swing significantly from month to month.

Including food and energy, the PCE price index is expected to rise 0.2% in July, up from 0.1% in June, and 2.5% Y/Y, unchanged from the prior month.

“Disinflation data continues today. The July personal consumer expenditure deflator is expected to show fairly stable inflation rates. It is worth remembering that if inflation falls because of owners’ equivalent rent, this does not change the spending power of any U.S. household,” UBS’ Paul Donovan said.

Other economic reports for today include the August Chicago PMI and the August consumer sentiment. The former is expected to come in at 45, while the latter is anticipated at 67.8.