Dow futures retreat; inflation data, Black Friday sales in focus

 U.S. stock futures traded lower Monday, as investors turned cautious approaching the end of a generally positive month and the release of key inflation data.

By 06:05 ET (11:05 GMT), the Dow Futures contract was down 27 points, or 0.1%, S&P 500 Futures traded 5 points, or 0.1%, lower and Nasdaq 100 Futures dropped 16 points, or 0.1%.

The main Wall Street indices closed last week higher, the fourth-straight winning week for the three major averages, fuelled by falling Treasury yields and cooling inflation readings that could signal the end of Federal Reserve rate hikes.

The NASDAQ Composite has rallied 12% so far in November, the Dow Jones Industrial Average has advanced more than 9%, and the S&P 500 is up almost 11%.

PCE inflation data in spotlight

However, the approach of the month’s end appears to be generating a degree of caution given these hefty gains, especially ahead of the release of a key inflation reading later in the week.

The Fed’s preferred inflation gauge, the personal consumption expenditures price index, is due on Thursday, and expected to have risen just 0.1% on the month in November, a drop from 0.4% in September.

The core reading, which strips out food and fuel costs and is considered a better gauge of underlying inflation, is expected to have risen 3.5% on a year-over-year basis, a drop from 3.7% the prior month, and the lowest since mid-2021.

Figures on new home sales and building permits for October are due later Monday, and this week also sees the first revision of third quarter GDP, the weekly report on jobless claims and the Fed’s Beige Book.

Black Friday sales in focus

The retail sector will be in the spotlight during the session, with investors looking for updates about the start of the shopping season in the wake of Black Friday and ahead of Cyber Monday.

Several U.S. retailers have warned, in their quarterly earnings reports, that consumer spending is weakening with shoppers facing financial pressure, but Mastercard (NYSE:MA) Spendingpulse said on Saturday that Black Friday sales rose 2.5% year-over-year excluding automotive sales, not adjusted for inflation.

Oil slides ahead of OPEC+ meeting

Oil prices fell sharply Monday, as investors warily awaited the delayed OPEC+ meeting later in the week for news of production levels into 2024.

By 06:05 ET, the U.S. crude futures traded 1.7% lower at $74.25 a barrel, while the Brent contract dropped 1.5% to $79.24 a barrel.

The crude benchmarks posted small gains last week, the first winning week in five, but fell sharply after the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, postponed a meeting to Nov. 30 from Nov. 26. The delay was reportedly caused by disagreements over planned production cuts.

The group has since moved closer to a compromise, according to reports, with an extension of the unilateral Saudi and Russia cuts through at least the first quarter of next year looking likely.

Additionally, gold futures rose 0.6% to $2,015.35/oz, rising to their highest level since May earlier, while EUR/USD traded 0.2% higher at 1.0955, with the dollar on track for its biggest monthly slide in a year.

(Oliver Gray contributed to this item.)