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U.S. equity futures bumped higher in early Friday trading, extending a solid week-long gain for the S&P 500, as investors added to bets on an outsized Federal Reserve rate cut following two key inflation readings.
Stocks ended higher on Thursday, taking the S&P 500 and the Nasdaq into a four-day winning streak, following a muted reading of factory gate inflation for the month of August that paired with the lowest headline CPI reading since February of 2021 the previous day.
Media reports, as well as comments from former New York Fed President Bill Dudley, ignited bets on a 50 basis point rate cut from the central bank next week in Washington which pulled Treasury yields lower and dragged the dollar to its lowest level of the year against the yen.
Fed Chair Jerome Powell and his colleagues are reportedly mulling a 50 basis point rate cut when they meet next week in Washington.