PCE Index, Intel Restructuring, Dell Earnings

Wall Street is anticipated to open higher on Friday as investors await the Federal Reserve’s preferred inflation data. Intel is exploring restructuring options, while Dell’s quarterly results and forecasts have exceeded expectations.

### 1. Focus on PCE Price Index
Investors are particularly focused on the anticipated pace and magnitude of potential Fed rate cuts. Key inflation data set to be released later today will provide critical insights. The Federal Reserve’s preferred inflation measure, the PCE price index, is expected to indicate a slight uptick in inflation for July. Analysts predict a month-over-month increase of 0.2%, leading to an annual gain of 2.6%, slightly above the 2.5% recorded the previous month. Fed Chair Jerome Powell noted recent progress on inflation during last week’s Jackson Hole symposium and indicated that “the time has come for policy to adjust.” This statement has led markets to believe that a rate cut is likely at next month’s policy meeting, marking the first such cut in over four years. However, a resilient economy, as evidenced by a modest revision to second-quarter GDP earlier this week, along with persistent inflation, may temper the Fed’s willingness to implement aggressive rate cuts.

### 2. Futures Rise Ahead of PCE Data
U.S. stock futures showed an uptick on Friday, capping off a volatile week positively ahead of the key inflation report release. As of 04:00 ET, the Dow futures rose 85 points (0.2%), the S&P 500 futures climbed 25 points (0.5%), and the Nasdaq futures increased by 145 points (0.8%). Attention remains on the Federal Reserve’s favored inflation gauge ahead of its upcoming policy meeting in September. On the final trading day of August, the broad-based index is set to gain nearly 1.3%, while another major index is on track for a 1.2% increase. However, one index is down around 0.5% for the month. In corporate updates, Dell Technologies is predicted to rise about 3% in premarket trading after increasing its annual forecasts. Meanwhile, Ulta Beauty’s stock fell about 7% after it reduced its annual sales and profit estimates due to weakened demand for premium cosmetics. Conversely, Lululemon’s stock grew by 4% after it reported better-than-expected earnings despite lowering its annual forecasts amid a slowdown in North American consumer spending.

### 3. Intel Discusses Restructuring Options
Intel is reportedly weighing the option of spinning off its foundry business and halting new factory plans as it navigates a significant downturn. According to sources, the chipmaker is consulting with investment bankers regarding these potential changes. Once a leader in the chip industry, Intel now faces stiff competition from companies like AMD and Nvidia, as well as Taiwan’s TSMC. Earlier in August, Intel made headlines by suspending its dividend and cutting around 15% of its workforce. The latest reports suggest that Intel may separate its product design from its foundry operations while scaling back expansion plans.

### 4. Dell Raises Annual Forecasts
Dell Technologies has upgraded its annual revenue and profit outlook, driven by strong demand for its AI-optimized servers, prompting a rise in its stock during premarket trading. The tech company now anticipates annual revenues between $95.5 billion and $98.5 billion, up from an earlier forecast of $93.5 billion to $97.5 billion. Additionally, it increased its adjusted profit per share estimate to $7.80, with a variance of 25 cents. Demand for AI-optimized servers surged around 23% sequentially to $3.2 billion in the second quarter. Revenues for the second quarter, which ended on August 2, rose approximately 9% to $25.03 billion, surpassing the average market expectation of $24.14 billion. The company reported an adjusted profit per share of $1.89, exceeding estimates of $1.71.

### 5. Crude Prices Supported by Libya Supply Concerns
Crude oil prices experienced an increase on Friday due to ongoing supply issues in Libya, although signs of decreasing demand moderated the gains. As of 04:00 ET, WTI futures rose by 0.6% to $76.33 a barrel, while Brent futures also increased by 0.6% to $79.32 a barrel. Both benchmarks are on track for gains of over 1% this week, with more than half of Libya’s oil production—approximately 700,000 barrels per day—offline, due to political instability affecting exports at various ports. Nonetheless, both benchmarks are expected to experience declines of around 2% in August, marking their second consecutive monthly drop amid concerns over slowing economic growth in the U.S. and China, which could impact future demand. Weak economic indicators from China have heightened fears of a slowdown in what is the world’s largest oil-consuming nation, and worries persist that U.S. demand may also wane as the busy summer travel season comes to a close.