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Dell falls after forecasting drop in FY26 gross margin
HP falls on downbeat quarterly profit forecast
January PCE price index rises 2.5%
Futures up: Dow 0.46%, S&P 500 0.25%, Nasdaq 0.05%
Updates to before markets open
By Johann M Cherian and Sukriti Gupta
Feb 28 (Reuters) - The benchmark S&P 500 and the Dow were set to open higher on Friday after data showed inflation rose as expected in January, while concerns that U.S. President Donald Trump's policies could further fuel price pressures kept investors cautious.
At 8:54 a.m. ET, Dow E-minis 1YMcv1 were up 201 points, or 0.46%, S&P 500 E-minis EScv1 were up 14.75 points, or 0.25% and Nasdaq 100 E-minis NQcv1 were up 10 points, or 0.05%.
A Commerce Department report showed the Personal Consumption Expenditures Price index rose 2.5% in January on an annual basis, as expected by economists polled by Reuters. Excluding volatile items such as food and energy, the index rose 2.6% on an annual basis in the previous month, also in line with estimates.
Megacaps such as Alphabet GOOGL.O and Meta META.O edged up 0.2% and 0.5%, respectively, while rate-sensitive banks such as JPMorgan Chase & Co JPM.N rose 1% and Bank of America BAC.N inched up 0.9% in premarket trading.
Traders see the Fed lowering borrowing costs by 61 basis points, little changed from before the report, according to data compiled by LSEG. Investors will assess comments from Chicago Fed President Austan Goolsbee later in the day.
"The good news is that there wasn't an upside surprise," said Art Hogan, chief market strategist at B. Riley Wealth.
"But the bad news is we sit here in a market that's (fallen) over the last five days and there's still an ongoing concern about the fire hose of policy proposals out there that have investors on the backside."
Friday's report is important for investors trying to gauge the central bank's next policy move, after policymakers reiterated a hawkish stance on interest rates. The fear has been that the new Donald Trump administration's policies, especially trade restrictions, could lead to a rise in domestic inflation.
Multiple recent reports suggesting a stalling economy and concerns that tech companies such as Nvidia NVDA.O and Microsoft MSFT.O might be overspending on artificial-intelligence infrastructure have put Wall Street's main indexes on track for monthly declines.
The benchmark S&P 500 .SPX logged declines in five of the past six sessions and is set for its biggest one-month drop since April 2024. The tech-heavy Nasdaq .IXIC is down more than 8% from its all-time high and is headed for its steepest one-month fall since September 2023.
Nvidia fell 1.7% after an 8.5% slide in the previous session, which saw $274 billion of its market value evaporate after the chip giant's weaker-than-expected quarterly gross margin forecast overshadowed an upbeat revenue outlook.
Dell DELL.N lost 7.6% as the PC maker forecast a decline in its adjusted gross margin rate for fiscal 2026, hit by higher building costs for AI servers.
Peer HP Inc HPQ.N fell 3.8% after its quarterly profit forecasts missed expectations.
Trump's latest threat to slap an extra 10% duty on imports from China hit U.S.-listed China stocks such as Alibaba BABA.N and Xpeng XPEV.N, which fell 3.5% and 7.1%, respectively.
Trump also said his proposed 25% tariffs on Mexican and Canadian goods would take effect on Tuesday.
Crypto stocks such as MicroStrategy MSTR.O and Coinbase COIN.O lost 1% each tracking bitcoin prices BTC=, which fell below $80,000.
Where investors think the Fed is headed https://reut.rs/41kltZb
(Reporting by Johann M Cherian and Sukriti Gupta in Bengaluru; Editing by Pooja Desai and Maju Samuel)
((johann.mcherian@thomsonreuters.com;))
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