U.S. stock futures are pointing to a firmer open on Friday as traders brace for the release of August inflation figures. Dow Jones Industrial Average futures are up 0.58%, S&P 500 futures are 0.57% higher, and Nasdaq 100 futures have gained 0.72% ahead of the opening bell.

European markets are also showing resilience, with Germany's DAX index rising 0.42%, the UK's FTSE 100 adding 0.60%, and France's CAC 40 climbing 0.59%. The pan-European STOXX 50 index is trading 0.67% higher. In commodities, WTI crude has fallen 3.26% to $99.14 per barrel, while Brent crude is down 3.50% at $103.86 per barrel.

Where to begin trading

Market expectations for Fed rate action are firming ahead of today's inflation report. Following two consecutive months of declines, gasoline prices have bounced, which is expected to accelerate headline consumer price growth. Economists surveyed project a 0.4% month-over-month increase in August CPI, accelerating from July's 0.1% reading, with year-over-year inflation expected to hold steady at 3.4%. Core CPI, which strips out volatile food and energy categories, is forecast to rise 0.2% on a monthly basis, mirroring July's pace, reflecting slower gains in rents, apparel, and new vehicle prices. The annual core reading is projected at 2.4%, slightly below the 2.5% recorded last month. Meanwhile, food prices are anticipated to show moderate monthly growth with annual gains near 3.0%. The likelihood of a Fed rate hike next week has strengthened, with market pricing now implying roughly a 70% probability of a move.

According to a recent Markets Pulse survey, escalating bond selling pressure is pushing Treasury yields toward levels that could significantly impact equities. Among 122 respondents, approximately 30% believe a 10-year Treasury yield between 5% and 5.25% would trigger a 10% market pullback from peak levels—a decline meeting the technical definition of a correction. An additional 22% of respondents place the threshold slightly higher, in the 5.25% to 5.5% range.

The International Energy Agency has revised its outlook, indicating the global oil supply-demand gap will be wider than previously estimated this year. Lack of progress toward ending the Iran war has delayed restoration of normal Middle East oil flows until 2027, contributing to elevated fuel prices. The agency now forecasts a 2.5 million barrel-per-day decline in global oil demand for 2026, compared to its earlier projection of 1.6 million barrels. Supply is now expected to fall short of demand by 1.74 million barrels per day in 2026, up from the previous estimate of a 1.27 million barrel deficit.

In a historic first, average U.S. diesel prices have breached $6.00 per gallon. According to AAA data released Friday, the national average diesel price now stands at $6.0556 per gallon, with California's average reaching $7.9827 per gallon. The fuel, which supports global supply chains though rarely directly felt by American consumers, is increasingly becoming an inflation driver as the peak demand season approaches. Truck drivers and farmers face refueling costs approximately 63% higher than the same period last year.

Geopolitical flashpoints intensify

A Houthi spokesman has announced that the Yemeni group will unveil a major military operation. The announcement follows reports that the group has completed its control over the Bab el-Mandeb Strait, a strategic waterway linking the Red Sea to the Gulf of Aden that serves as a vital maritime route connecting the Indian Ocean, Suez Canal, and Europe. Approximately 10% of global trade transits through this channel. The statement is scheduled for 4:00 PM local time, corresponding to 9:00 PM Beijing time.

Gulf foreign ministers are planning to meet with their Iranian counterpart next Monday in the Omani coastal city of Salalah, responding to an Omani-Iranian initiative seeking support for an agreement to temporarily manage shipping through the Strait of Hormuz. Multiple countries have confirmed attendance, though final details are still being finalized. The potential meeting underscores regional urgency to reopen the strait and de-escalate tensions between Washington and Tehran.

Two U.S. officials reported that Saudi Crown Prince Mohammed made two calls to President Trump on Thursday, urging American strikes against the Houthis; however, the President declined. The U.S. government currently has no plans for direct intervention, emphasizing increased support for Saudi Arabia while avoiding direct military involvement. General Brad Cooper, head of U.S. Central Command, traveled to Saudi Arabia on Thursday for emergency coordination meetings. According to a senior administration official, the priority remains keeping the Red Sea open while leaving broader combat operations to regional allies.

Corporate and technology developments

OpenAI's chief executive has indicated openness to slowing the pace of frontier AI development. Sam Altman reportedly told employees during an all-hands meeting this week that the company may adjust its development cadence, potentially coordinating with other AI laboratories, though some may not agree. Recent weeks have seen employees at leading AI firms publicly express concerns about increasing risks associated with advanced systems. Both OpenAI and competitor Anthropic have confidentially filed for IPOs earlier this year.

Oracle Corporation (NASDAQ: ORCL) delivered exceptional fiscal first-quarter results with revenue increasing 30% year-over-year to $19.35 billion, surpassing the analyst consensus of $19.13 billion. The company attributed growth to robust cloud infrastructure performance and expanded data center capacity. Net income attributable to common shareholders jumped 60% to $4.68 billion, with adjusted earnings per share of $1.92 exceeding estimates of $1.75. Oracle secured over $30 billion in new AI cloud contracts during the quarter, pushing its remaining performance obligations up 4% sequentially to $664 billion, well above the $618 billion consensus. The stock is advancing approximately 6% in pre-market trading.

NVIDIA's Grace Blackwell platform shipments have reportedly grown 27% quarter-over-quarter, reflecting sustained strong demand from cloud service providers and AI infrastructure companies. The platform combines the Grace CPU with Blackwell GPUs and supports liquid-cooled rack systems such as the GB200 NVL72. The company previously indicated Blackwell demand exceeds available supply.

Prominent short-seller Michael Burry has trimmed portfolio exposure, closing put positions on NVIDIA and Palantir Technologies (NASDAQ: PLTR). He cited a desire to hold more cash to assess evolving market conditions in the fall. His largest long positions include Lululemon, Molina Healthcare, and MercadoLibre, though these have also been reduced.

SpaceX (PRIVATE: SPCX) CFO Bret Johnson revealed at the Goldman Sachs Communacopia + Technology Conference that the company has secured another large AI compute hosting order, with this segment rapidly becoming a core growth engine. Johnson detailed timelines across ground compute expansion, orbital computing, Starship commercialization, and satellite-to-phone connectivity. The company aims to reach $100 billion in annualized recurring revenue by the end of 2026.

Adobe Inc (NASDAQ: ADBE) reported mixed fiscal third-quarter results, with record revenue of $6.76 billion and adjusted earnings per share of $6.13 surpassing consensus estimates. "AI-first" products saw annual recurring revenue grow over 150%, while monthly active users surpassed one billion for the first time. However, softer-than-expected fourth-quarter guidance has driven the stock down 4% in pre-market trading.

Kroger (NYSE: KR) shares are declining over 3% pre-market despite second-quarter earnings beating expectations. Comparable store sales grew only 0.2%, significantly below market forecasts, prompting the company to cut its full-year comparable sales guidance. The Cincinnati-based grocer reported total sales of $34.6 billion, up 2.1% year-over-year and slightly ahead of the $34.53 billion consensus. Adjusted earnings per share came in at $1.09, topping both the prior-year figure of $1.04 and analyst estimates of $1.04.

Economic calendar highlights

Today's session features several key data releases: U.S. August CPI at 8:30 AM ET, the University of Michigan's preliminary September consumer sentiment index at 10:00 AM ET, and Baker Hughes' weekly U.S. rig count data at 1:00 PM ET.