An American flag is displayed on the facade of the New York Stock Exchange in New York. (AP Photo/Julia Nikhinson, File)
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Wall Street pointed toward small declines early this morning ahead of the release of closely-watched inflation data that could influence what the Federal Reserve does at its policy meeting next week.
Futures for the Dow Jones Industrial Average and S&P 500 each slipped 0.4 percent.
The Commerce Department releases its consumer spending report this morning, which contains a measure of inflation that’s closely watched by the Fed. The Fed is has aggressively tried to turn back inflation by raising its key lending rate nine straight times, trying to cool spending by Americans.
ExxonMobil shares inched higher after the energy giant reported that it more than doubled its profit during the first quarter. The Texas company produced more oil during the first three months of 2023 in order to overcome declining energy prices as anxiety over a potential recession festered.
On Thursday, U.S. benchmarks advanced after Meta Platforms became the latest Big Tech company to blow past profit forecasts.
Facebook’s parent company jumped 13.9 percent. Meta beat analysts’ estimates for profit during the first three months of the year and also gave a forecast for revenue that topped expectations.
It joined Microsoft and Alphabet, which reported better-than-expected results earlier in the week, and Amazon followed suit after trading closed for the day.
A report on Thursday gave the first indication of just how much the U.S. economy is slowing: down to an estimated 1.1 percent growth at an annual rate during the first three months of 2023 from 2.6 percent at the end of last year. A measure of inflation favored by the Fed came in hotter than hoped.
A separate report showed that fewer workers applied for unemployment benefits last week, raising hopes that the job market may remain resilient as other areas slow.
Investors took the data to mean the Federal Reserve next week will see the economy is still strong enough to handle another hike to interest rates at its next meeting.
The Fed has been raising rates at a furious pace since early last year, up to the highest level since 2007 from its record low to try to get price increases under control.
But high rates slow the entire economy and hurt prices for investments. They’ve hit some areas of the economy particularly hard, including the housing and manufacturing industries.
Many investors are preparing for a possible recession this year, which could mean further hits to corporate profits.
The dollar rose against the Japanese yen after the Bank of Japan kept its ultra-lax monetary policy unchanged.
In its first policy meeting under its new governor, Kazuo Ueda, the BOJ kept its key policy rate at minus 0.1 percent even as Japan reported inflation excluding volatile fresh food costs was at 3.5 percent in March.
Japan’s central bank has overshot its inflation target of 2 percent, but expects conditions to worsen since the U.S. and other major economies are thought to be headed for recession.
The dollar jumped to 136.03 yen from 133.96 yen earlier in the day. The yen had held steady against the dollar in recent months on speculation that the BOJ might alter course. Higher interest rates mean higher investment returns, and the dollar has gained in tandem with rate hikes by the Federal Reserve as it attempts to curb inflation.
In European trading, Germany’s DAX and Britain’s FTSE 100 each lost 0.1 percent, while in Paris, the CAC 40 had lost 0.7 percent by midday.
In Asia, Tokyo’s Nikkei 225 index added 1.4 percent to 28,856.44 and the Hang Seng in Hong Kong gained 0.5 percent to 19,950.02
The Shanghai Composite index surged 1.1 percent to 3,323.27, while the S&P/ASX 200 in Sydney edged 0.2 percent higher to 7,309.20.
The Kospi in Seoul edged 0.2 percent higher, to 2,501.53. India’s Sensex added 0.3 percent and benchmarks in Southeast Asia fell.
In other trading today, U.S. benchmark crude oil added 35 cents to $75.11 per barrel in electronic trading on the New York Mercantile Exchange. It gained 46 cents to $74.76 per barrel on Thursday.
Brent crude, the international standard, picked up 47 cents to $78.69 per barrel.
The euro slipped to $1.0983 from $1.1026.
On Thursday, the S&P 500 rose 2 percent and the Dow Jones Industrial Average rose 1.6 percent. The Nasdaq composite led the market with a 2.4 percent gain.
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