US stock futures pointed higher on Friday as investors positioned for the August Consumer Price Index (CPI) report, the last major inflation gauge before next week's Federal Reserve policy meeting. Dow Jones Industrial Average futures climbed roughly 300 points, or 0.5%, while S&P 500 and Nasdaq 100 contracts gained about 0.5% and 0.6%, respectively, following four consecutive losing sessions.
The 10-year Treasury yield hovered near 4.95%, just below the psychologically significant 5% level, keeping equities sensitive to the inflation data. Oil prices offered some relief, with Brent crude retreating from an overnight peak near $110 but still above $106, while WTI slipped toward $101.
CPI could swing next week's Fed decision
The August CPI report is due at 8:30 am ET, with forecasts clustering around 3.3%-3.4% annual headline inflation and core inflation near 2.4%. Markets are pricing in roughly a two-thirds probability of a quarter-point rate hike next week. Analysts noted that a firm headline reading driven by energy costs could strengthen the case for an immediate hike, while a softer core number would give equities and Treasuries room for a relief rally.
10-year yield flirts with 5%
The 10-year Treasury yield traded around 4.95% after touching 4.979% overnight, keeping the 5% threshold firmly in view. Higher risk-free yields make expensive equities less attractive and raise financing costs across mortgages, autos, and corporate borrowing. The 30-year yield has climbed to levels not seen since 2007, meaning a hot CPI print could hit valuation-sensitive growth stocks hardest.
Oil pulls back, but inflation shock remains
Brent eased to around $106 after briefly approaching $110, while WTI slipped towards $101. Even after Friday's retreat, Brent is still on course for a double-digit weekly gain. ING analysts said oil is reflecting a reassessment of how long the Middle East conflict could last and how severe the supply threat may become. US diesel prices have also reached a record $6.06 a gallon, keeping transport and production costs under pressure. For more on the crude rally, see this analysis of Brent's weekly surge.
Oracle gives AI bulls something tangible
Oracle shares jumped about 7% before the bell after quarterly revenue rose 30% to $19.3 billion, with cloud-infrastructure revenue more than doubling. The company added more than $30 billion of AI cloud contracts, lifting remaining performance obligations to $664 billion. JPMorgan said the quarter eased concerns about data-centre delays and whether signed AI contracts would convert into revenue. However, spending remains a concern, as Oracle's capital requirements are enormous, so investors will still watch free cash flow closely.
Adobe shows that beating earnings is no longer enough
Adobe fell about 2%-3% premarket despite reporting record quarterly revenue of $6.76 billion and adjusted earnings of $6.13 a share. AI-first annual recurring revenue grew more than 150% year on year, but investors focused on slower near-term growth and the company's shift towards a freemium model. Citi analysts kept a Neutral stance and said investors still need greater strategic clarity as Adobe navigates AI competition and a leadership transition. The reaction reinforces a broader software-market rule: strong AI adoption now needs to show up in faster forward growth.
As markets await the CPI print, the interplay between inflation, yields, and oil remains critical. For context on how recent oil surges have pressured equities, see how rising crude and rate hike bets hit the Dow. Additionally, the ongoing AI-driven moves in tech are highlighted by Nvidia's recent slide amid oil and regulatory pressures.
This article is for informational purposes only and does not constitute financial advice.
