Stock futures are little changed as investors await more trade news and fresh inflation data: Live updates

The April PCE index, the Federal Reserve's preferred inflation gauge, is expected to remain above 2%, with economists forecasting a 0.1% monthly and 2.2% yearly increase; core PCE is projected to rise 0.1% monthly and 2.6% yearly. Despite expectations for a potentially cool inflation reading, some analysts anticipate limited market reaction due to short-term data noise and ongoing impacts from tariff-related import strategies. In after-hours trading, Gap shares fell sharply on weak revenue guidance, while Dell Technologies gained following better-than-expected revenue and raised full-year earnings guidance.

Analysis

The financial markets anticipate the release of April's Personal Consumption Expenditures (PCE) index, with economists forecasting headline PCE to rise 0.1% month-over-month and 2.2% year-over-year, while the Federal Reserve's preferred core PCE measure is projected at 0.1% monthly and 2.6% annually, signaling that inflation persists above the 2% target. Vanguard economists have also flagged potential upward revisions to January and March PCE data stemming from producer price index revisions in services, which could further underscore inflationary pressures. Despite expectations for a cool reading by some, such as Cetera's CIO, its market impact might be limited due to what is described as "noisy" short-term data and distortions from companies front-running tariffs. This cautious sentiment is mirrored in stock futures, which were little changed (Dow futures -0.09%, S&P 500 futures -0.1%, Nasdaq 100 futures -0.1%) as investors await more clarity on U.S. trade policy. In after-hours trading, company-specific news drove significant divergence: Gap (GPS) shares plummeted over 16% as its lackluster Q2 revenue guidance (projected flat year-over-year versus analyst expectations of a slight gain) overshadowed a Q1 earnings beat. Conversely, Dell Technologies (DELL) shares rose over 5% after its Q1 revenue of $23.38 billion surpassed analyst estimates of $23.14 billion, and the company raised its full-year earnings guidance. Costco (COST) shares saw minimal change despite reporting quarterly results that beat analyst expectations, with earnings of $4.28 per share on $63.2 billion in revenue (versus $4.24 and $63.19 billion expected) and above-estimate same-store sales growth and gross margins, suggesting strong performance may have already been priced in or that broader market concerns are prevailing.

Key Decisions for Investors

• Investors should closely monitor the upcoming PCE inflation data, particularly core figures and any revisions, as persistent inflation above the Fed's target could influence monetary policy expectations, even if some analysts anticipate a muted immediate market reaction to this specific release.
• Emphasize scrutiny of corporate forward guidance over reported earnings from the previous quarter, as demonstrated by Gap's significant stock decline on a weak Q2 revenue outlook and Dell's rally following an upgraded full-year earnings forecast, indicating the market's heightened sensitivity to future prospects.
• Given the divergent after-hours stock performances, such as those of Gap, Dell, and Costco, maintain a selective investment approach, focusing on companies with robust fundamentals and positive forward guidance, as individual company catalysts are heavily influencing stock trajectories.
• Factor in the ongoing uncertainty surrounding U.S. trade policy, which is contributing to cautious investor sentiment and could introduce further market volatility or impact companies with significant import dependencies or those affected by tariff-related inventory strategies.