Wall St Set For Subdued Open As Intel Warning Hits Chip Stocks

Wall Street was set to open lower on Friday after Intel's bleak outlook dragged chipmakers lower, while declines were contained by a reading on the Federal Reserve's preferred inflation measure, which showed signs of price pressures easing.

The Commerce Department's personal consumption expenditures (PCE) index showed a 0.1% rise last month after a similar increase in November. U.S. consumer spending also fell in December, putting the economy on a lower growth path heading into 2023.

Traders of futures tied to the Fed's policy rate kept bets that the central bank will raise rates just once more beyond next week's widely expected quarter-point hike before stopping.

Markets expect the terminal rate to rise to 4.9% in June, still below many policymakers expectations of beyond 5%.

"That in-line data is certainly going to be sufficient to justify the Fed slowing down to a 25 basis point rate hike when they make their decision on February 1st," said Art Hogan, chief market strategist at B Riley Wealth.

"We had expectations for better data and this better news is likely priced in, so then you can shift your focus to things like earnings and while (they are) a mixed bag, we are still getting more good news than bad news."

Intel tumbled -9.5% in premarket trading after the company reported its worst revenue slump in at least two decades and warned of additional losses amid weak demand for personal computers.

Rival Advanced Micro Devices Inc eased -2.6%, while Nvidia Corp and Applied Materials Inc fell -1.5% and -2.9%, respectively.

Second largest U.S. oil producer Chevron Corp, slid -1.4% on quarterly earnings falling shy of analyst estimates undercut by an asset writedowns and a retreat in oil and gas prices.

In a bright spot, American Express Co jumped 6.7% on raising its earnings forecast for 2023 above street expectations, while credit card rival Visa Inc added 1.5% on upbeat quarterly results.

At 8:49 a.m. ET, Dow e-minis were up 1 points, or 0%, S&P 500 e-minis were down 11.75 points, or 0.29%, and Nasdaq 100 e-minis were down 53.25 points, or 0.44%.

Market sentiment during the week was shaped by investors tracking the cautious tone heralded by companies drawing attention to concerns of a tough macro environment.

Wall Street is still set to end the week higher aided by renewed appetite for growth stocks earlier in the month.

Nearly a quarter of S&P 500 companies have reported earnings so far, of which 69% have beaten analysts' estimates, according to Refinitiv data as of Thursday.