Wall Street Gears Up for Strong Opening Amid Inflation Data and Tech Rally

Wall Street is set for a robust opening, with tech stocks leading the charge. The U.S. inflation report showed moderate gains, supporting bets on a Fed rate cut in September. Key indexes, including the Nasdaq, are recovering after recent losses, while small-cap stocks show continued strength.

Wall Street's main indexes were poised for a strong opening on Friday, with the Nasdaq leading as megacap tech and chip stocks staged a recovery. A key inflation reading met expectations, lifting prospects for a Fed rate cut. Data indicated the Personal Consumption Expenditures Price Index rose by 0.1% in June and 2.5% annually, both in line with forecasts.

Core PCE, excluding food and energy, increased slightly above estimates at 0.2% monthly and 2.6% annually. The moderate inflation rise suggests an easing environment, potentially prompting the Fed to reduce rates in September. Rick Meckler of Cherry Lane Investments noted that the inflation report supports a soft landing narrative. Fed rate cut odds for September rose to 91.5%, per CME's FedWatch.

Tech stocks, including Apple's Magnificent Seven, were up in premarket trading. Chip stocks rebounded, with companies like Intel and Qualcomm seeing gains. Dow e-minis rose by 0.54%, S&P 500 e-minis by 0.71%, and Nasdaq 100 e-minis by 0.93%. Despite recent tech sell-offs, the Russell 2000 index saw growth, poised for its third straight week of gains, buoying investor optimism.