U.S. stock index futures were largely unchanged early Friday, as Wall Street hovered near record levels while awaiting further details on a potential U.S.-Iran ceasefire extension. Traders also focused on a sharp premarket rally in Dell Technologies following an upbeat revenue forecast.
As of 4:46 a.m. ET, Dow E-minis edged up 37 points, or 0.07%. S&P 500 E-minis added 2.5 points, or 0.03%, while Nasdaq 100 E-minis dipped 6 points, or 0.02%.
Markets Pause After Record Closes
The S&P 500 and Nasdaq closed at new all-time highs on Thursday, extending a recent rally. The S&P 500 rose 0.58% to 7,563.63, the Nasdaq gained 0.91% to 26,917.47, and the Dow Jones Industrial Average finished up 0.05% at 50,668.97. The rally was fueled by reports of a draft agreement between the U.S. and Iran, though the deal still requires President Trump's approval and Iran's Tasnim news agency noted the text is not final.
U.S. exchanges are operating on a regular schedule Friday after the Memorial Day holiday earlier this week. Premarket trading on Nasdaq runs from 4:00 a.m. to 9:30 a.m. Eastern. The next full-market closure is Juneteenth on June 19.
Inflation Data and Fed Concerns
Inflation remained a key focus after the Commerce Department reported Thursday that the PCE price index rose 3.8% year over year in April. Core PCE, excluding food and energy, increased 3.3%. Month over month, prices climbed 0.4%. Consumer spending rose 0.5%, while the saving rate fell to 2.6%.
The Bureau of Economic Analysis also revised its first-quarter real GDP growth estimate down to a 1.6% annual rate from 2.0%, citing weaker investment and consumer spending than initially reported.
Federal Reserve officials face a difficult policy path. A Reuters report indicated that more central bankers see a case for raising rates if inflation does not decline soon. Fed Governor Lisa Cook said she is "prepared to raise rates" if disinflation fails to materialize. St. Louis Fed President Alberto Musalem noted that inflation risks now lean more toward prices than employment.
Olu Sonola, head of U.S. economics at Fitch Ratings, described the inflation picture as "increasingly uncomfortable for the Fed," noting that the central bank cannot solve a supply shock but also cannot ignore one that drives core inflation.
Dell Surges on AI Revenue Outlook
Dell Technologies shares jumped nearly 40% in premarket trading after the company raised its full-year revenue forecast to between $165 billion and $169 billion, up from a prior range of $138 billion to $142 billion. The company also boosted its fiscal 2027 AI server revenue outlook to about $60 billion, from $50 billion. The news lifted shares of Hewlett Packard Enterprise and Super Micro Computer, signaling strong demand for AI data-center suppliers.
Dell COO Jeff Clarke said on the earnings call that the company is "repricing … every day" as component costs rise and demand shifts. Melissa Otto, head of S&P Global Visible Alpha research, noted that Dell's scale, supplier relationships, and ability to prioritize demand give it an edge over rivals.
Retail Struggles Continue
Retail stocks faced pressure. Gap shares slid 15% and American Eagle Outfitters fell 10% in premarket trading after both retailers issued weaker outlooks, citing ongoing challenges in discretionary spending. Gap cut its annual sales forecast, while American Eagle flagged a squeeze on gross margins for the current quarter. Reuters reported that Gap's weakness stemmed from Old Navy's women's seasonal styles, while American Eagle struggled with women's bottoms and slow spring weather.
Broader Market and Commodities
Other markets showed relative stability. Brent crude futures fell 1.33% to $92.46 a barrel, while gold gained 0.50% to $4,521.90 an ounce. The U.S. 10-year Treasury yield stood at 4.455%. Lower oil prices provided support to equities, as energy costs are a key link between geopolitical tensions and inflation concerns.
Daniela Hathorn, senior market analyst at Capital.com, said "risk appetite has improved" with easing geopolitical worries, but cautioned that "valuations are elevated" and investors remain sensitive to headlines and inflation reports. Jamie Cox, managing partner at Harris Financial Group, described traders as "on a hair trigger" for deal news, reflecting a market near records that is still betting oil, inflation, and the Fed won't turn negative.
Investors were also watching for speeches from Fed officials Anna Paulson, Neel Kashkari, and Mary Daly for any hints on rate policy. A stronger rate hike signal, a setback in U.S.-Iran talks, or further gains in crude oil could threaten the week's rally as month-end approaches.
