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U.S. STOCK FUTURES PARE LOSSES JUST SLIGHTLY AFTER AS EXPECTED PCE

The main U.S. equity index futures are paring losses slightly after the release of the latest Personal Consumption Expenditures (PCE) report.

E-mini S&P 500 futures EScv1 are now down around 0.25% vs a loss of around 0.35% just before the numbers came out.

The July headline PCE number on a month-over-month basis came in at 0.2%, which was in line with the estimate. The year-over-year print was 2.6% also flat with the 2.6% Reuters Poll. The core PCE index on a month-over-month basis came in at 0.3% vs a 0.3% estimate. On a year-over-year basis, the core reading came in at 2.9% vs the 2.9% Reuters Poll.

July personal income month-over-month came in at 0.4%, which was exactly in line with the 0.4% estimate, as well as above June's 0.3% print. July adjusted consumption came in at 0.5% vs a 0.5% Reuters Poll, and June's upwardly revised 0.4% read.

Separately, the July advanced goods trade balance was -$103.6 billion vs the -$89.45 billion estimate.

According to the CME's FedWatch Tool, the probability that the Fed cuts rates by 25 basis points (bps) at its September 16-17 meeting is now around 87% vs 83% just prior to the release of the economic data. The chance that the FOMC leaves rates unchanged is now 13% vs 17%.

Looking further out into 2025, the FedWatch Tool is still showing a bias for a December rate cut. Interest rate probabilities are now pricing in about 55 basis points of cuts through year-end vs around 54 bps just before the data.

The U.S. 10-Year Treasury Yield US10YT=RR is now around 4.23%. It was around 4.23% just before the numbers came out. The yield ended Thursday at 4.207%.

S&P 500 sector SPDR ETFs are mixed with just modest changes in premarket trade with Utilities XLU.P, up just 0.2%, the biggest gainer. Tech XLK.P, down about 0.4%, is the weakest group.

The SPDR S&P regional banking ETF KRE.P is unchanged.

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

"After two months in the dumps, spending on durable goods jumped in July, driven by autos. Real incomes excluding transfer receipts—a key recession indicator—showed a healthy advance in July."

Jacobsen added, "Peak tariff uncertainty in May and June weighed on jobs, spending, and incomes. Hopefully the relief in July can continue without too much permanent damage being done."

In terms of additional data of note today, August Chicago PMI is due at 09:45 a.m. EDT. The estimate is for 46 vs 47.1 last month.

August UMich final sentiment is due at 10:00 a.m. The Reuters Poll calls for 46.0 vs a 47.1 prior read.

Here is a premarket snapshot from 08:51 a.m. ET:

(Terence Gabriel, Chuck Mikolajczak)

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EARLIER ON LIVE MARKETS:

LIGHT AT THE END OF THE TUNNEL FOR EUROPE'S AUTOS? CLICK HERE

IS THE EURO SET TO MAKE HISTORY? CLICK HERE

BUYING LE DIP CLICK HERE

STOXX DIPS, BRITISH BANKS RETREAT CLICK HERE

EUROPE BEFORE THE BELL: STEADY START EXPECTED BEFORE INFLATION FIGURES CLICK HERE

WAITING ON PCE FOR RATE CLUES CLICK HERE