S&P 500, Nasdaq futures down as caution builds ahead of inflation data

By Niket Nishant and Sukriti Gupta

Futures tied to the S&P 500 and the Nasdaq edged lower on Thursday, after a record-breaking rally earlier this week, as investors awaited fresh catalysts to sustain the momentum in what has been an unusually strong September for markets.

The tentative moves reflect a broader sense of caution ahead of Friday's release of the Personal Consumption Expenditures index, the Federal Reserve's preferred inflation measure, which could shape expectations for the path of interest rates.

With Fed Chair Jerome Powell noting earlier this week that asset prices appeared fairly highly valued, the stakes are higher for both economic data and corporate earnings to justify current market valuations.

Investors are focused on whether the optimism that has propelled indexes to record highs since the tariff-driven selloff on April 2 is backed by solid fundamentals.

"The bearish bias is likely to continue into Friday's PCE data as markets want more concrete evidence that inflation is cooling, leaving risks skewed to the downside if the data comes in hotter than expected," said Daniela Hathorn, senior market analyst at online trading firm Capital.com.

At 06:50 a.m. ET, Dow E-minis (YMcv1) were mostly unchanged, S&P 500 E-minis ES1! were down 12 points, or 0.18%, and Nasdaq 100 E-minis NQ1! were down 64.75 points, or 0.26%.

Data on Wednesday showed sales of newly constructed single-family U.S. homes unexpectedly surged 20.5% in August, but some analysts cautioned that the spike may reflect short-term factors.

"One possibility could be that homebuilders are offering greater incentives to lock in sales now ahead of future challenges from a weakening labor market, increased building costs and shrinking labor supply," Citigroup economists said.

More economic data is expected on Thursday, including the National Association of Realtors' existing home sales report, weekly jobless claims, durable goods orders and the Commerce Department's final estimate of second-quarter GDP.

Investors will also monitor commentary from a slate of Fed officials to gauge the central bank's evolving stance.

Fed Vice Chair for Supervision Michelle Bowman is scheduled to speak in Washington, while Chicago Fed President Austan Goolsbee will participate in a discussion on the economy in Michigan.

A potential government shutdown could also be looming in Washington, where budget negotiations have so far failed to yield an agreement, a development that could inject fresh volatility into an already uncertain market backdrop.

Among the stocks in focus is Intel INTC, which has gained 3.5% before the open, a day after Bloomberg News reported that the chipmaker has approached Apple AAPL about securing an investment.

Brokerage firm Seaport Research Partners upgraded Intel's stock to "neutral" from "sell". Apple AAPL is up 0.3%.

Shares of Opendoor Technologies OPEN gained 6.8%, after trading firm Jane Street disclosed a 5.9% stake in the residential real estate platform.

U.S.-listed shares of Lithium Americas LAC climbed about 13.6%, after nearly doubling in the previous session, following a Reuters report that President Donald Trump's administration is seeking an up to 10% stake in the miner.

Oracle ORCL slipped 2.1% after a regulatory filing showed on Wednesday that the company was aiming to raise $18 billion in debt.