By Avinash P and Purvi Agarwal
Aug 14 (Reuters) – U.S. stock index futures were largely subdued on Friday, a day after the S&P 500 closed at a record high, as rising crude prices following the latest developments in the Middle East kept investors cautious.
Tame producer and consumer inflation readings this week eased worries of a September rate hike by the U.S. Federal Reserve, boosting the benchmark index and setting it and the Nasdaq up for a third consecutive weekly advance.
However, tensions in the Middle East persisted, with transit through the Strait of Hormuz appearing to grind to a near standstill after two more ships were attacked there and the United States said it could maintain a naval blockade of Iran indefinitely.
Brent crude futures gained 1% on Friday.
Investors may be becoming desensitized to geopolitical shocks, but central banks cannot yet dismiss the latest developments, said Elwin de Groot, Rabobank’s head of macro strategy.
“This week’s U.S. inflation report, while broadly on the mark, is unlikely to settle the debate within central banks,” he added.
With energy prices remaining elevated and Fed Chair Kevin Warsh offering little guidance on the central bank’s next move, investors are scrutinizing economic data more closely.
Investors will also parse July retail sales data and a preliminary University of Michigan consumer sentiment reading later in the day.
At 7:41 a.m. ET, Dow E-minis were down 65 points, or 0.12%, S&P 500 E-minis were up 5.75 points, or 0.07%, and Nasdaq 100 E-minis were up 57.25 points, or 0.19%.
In premarket movers, Applied Materials fell 5.6%, even after the chip equipment maker forecast fourth-quarter revenue above Wall Street estimates. The stock has more than doubled so far this year.
Investors have sold AI-linked stocks at the first sign of slowing growth, even when companies reported strong results and upbeat forecasts, while rewarding those whose AI investments have produced clear returns.
Reddit jumped over 10% after the social media company was selected to join the S&P 500 index, effective August 18.
Fox Corp’s Class A shares gained 2% after J.P. Morgan upgraded the media company to “overweight” from “neutral.”
Shares of some drone makers gained after President Donald Trump said late on Thursday that he would impose tariffs on imports of drones and their components.
Red Cat jumped 7.5%, Unusual Machines added 14% and AeroVironment gained 3.9%.
Chicago Fed President Austan Goolsbee said late on Thursday the latest U.S. inflation data has been “a little better,” and that he was hopeful inflation could continue to improve.
Comments from Atlanta Fed interim President Cheryl Venable will also be closely watched later in the day.
(Reporting by Avinash P and Purvi Agarwal in Bengaluru; Editing by Tasim Zahid)
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