US stock futures slip on weak Intel guidance; PCE data due

January 26, 2024 6:57 AM EST -- U.S. stock futures traded lower Friday, with sentiment hit by disappointing guidance from chip manufacturer Intel as investors awaited the release of key inflation data.

By 06:15 ET (11:15 GMT), the Dow Futures contract was down 65 points, or 0.2%, S&P 500 Futures traded 9 points, or 0.2%, lower and Nasdaq 100 Futures dropped 105 points, or 0.6%.

The main U.S. averages posted gains on Thursday, and are on track for another winning week. The broad-based S&P 500 gained 0.5%, closing at a fresh all-time high, the Dow Jones Industrial Average gained 0.6%, while the tech-heavy Nasdaq Composite rose 0.2%, weighed by hefty losses from Tesla (NASDAQ: TSLA).

Weak Intel guidance weighs

Thursday’s positive sentiment was largely generated by strong U.S. fourth-quarter economic growth data which bolstered hopes that the world's largest economy was on course for a soft landing.

However, a disappointing first-quarter revenue forecast from Intel (NASDAQ: INTC) after the market close on Thursday has caused this optimism to dissipate.

The semiconductor manufacturer said it expects to post revenue in its current three month period of $12.2 billion to $13.2 billion, a range that was well below Wall Street projections of $14.5 billion, according to LSEG data cited by Reuters.

Shares slumped over 10% premarket, setting the stock up for a roughly $20 billion fall in market value on Friday as things stand. Intel has been one of the best performing companies over the last year, with its stock up 75% during that period.

The earnings season continues Friday, with results due from the likes of consumer products group Colgate-Palmolive (NYSE: CL), transport firm Norfolk Southern (NYSE: NSC) and American Express (NYSE: AXP).

Amex rival Visa (NYSE: V) offered up tepid second-quarter sales guidance, with the world's largest payments processor forecasting an uptick in the "upper mid- to high single-digit" in net revenue during its current period -- implying a slowdown from the 11% increase posted in the corresponding period in 2023.

Fed’s favorite inflation gauge due

The economic data slate centers Friday around the personal consumption expenditures price index, the Federal Reserve's preferred gauge of inflation.

The index is estimated to have increased by 2.6% versus the year-ago period last month, matching November's pace. The year-on-year mark of the so-called "core" reading, which strips out volatile items like food and energy, is also seen rising by 3.0% from 3.2% in November.

Coupled with Thursday's solid gross domestic product figures, the data could factor into how the Fed approaches potentially lowering interest rates from more than two-decade highs.

Crude on course for weekly gains

Oil prices fell Friday, handing back some of the previous session’s strong gains, but are still on course for hefty weekly gains on the back of healthy U.S. economic growth and signs of Chinese stimulus.

By 06:15 ET, the U.S. crude futures traded 0.8% lower at $76.73 a barrel, while the Brent contract dropped 0.5% to $82.03 a barrel, after climbing to their highest levels since December during the previous session.

The crude benchmarks are both still on course for gains of more than 4%, their biggest weekly gains since October, after data on Thursday showed the U.S. economy expanded more quickly than expected in the fourth quarter, suggesting economic resilience from the world’s largest crude consumer.

China, the world's second-largest oil consumer, had also announced a deep cut to bank reserves to spur economic growth earlier in the week, while oil supply disruptions in the Red Sea continued.

Additionally, gold futures rose 0.3% to $2,022.90/oz, while EUR/USD traded 0.2% higher at 1.0867.

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