U.S. stock index futures fell Friday as chip stocks sagged on a dour revenue forecast from Intel, while a crucial inflation print that could influence the Federal Reserve’s monetary policy outlook topped investors’ watch list.

Intel lost 11.3% in premarket trading after forecasting that its first-quarter revenue could miss estimates by over $2 billion, driving 1.2%-2.5% losses in other chip stocks including Nvidia, Advanced Micro Devices , Qualcomm and Micron Technology.

This, along with Tesla’s growth warning on Wednesday, likely deepened worries over rich valuations of heavily weighted megacap companies, also known as the “Magnificent Seven.”

Chipmaking tools maker KLA Corp also shed 6.4% following its third-quarter revenue forecast below estimates.

A recent run in chip and technology stocks helped resurrect a Wall Street rally, which had lost steam at the year’s start after bumper gains in 2023, as investors grappled with growing uncertainty over when interest-rate cuts could arrive this year.

All eyes are now on the core personal consumption expenditures (PCE) price index – the Federal Reserve’s preferred measure of inflation – that is expected to rise by 0.2% month-on-month and by 3% on an annual basis in December. The data is due at 8:30 a.m. ET.

“The bigger picture is that evidence of a durable return in inflation to the Fed’s target is mounting,” Pantheon Macroeconomics analysts said in a note, expecting the inflation data to trigger a 150-basis-point in rate cuts this year.

Traders now see a 90% likelihood of the Fed delivering its first rate cut in May, as per CME Group’s FedWatch Tool, from earlier expectations in March.

The S&P 500 closed at an all-time high for a fifth straight session on Thursday after data reflecting strong fourth-quarter U.S. economic growth shrugged off dire predictions of a recession in the aftermath of the Fed’s rapid rate hikes.

All the three major indexes are set for their third straight week of gains, marking their 12th weekly gain out of 13.

At 5:36 a.m. ET, Dow e-minis were down 70 points, or 0.18%, S&P 500 e-minis were down 9.5 points, or 0.19%, and Nasdaq 100 e-minis were down 100.5 points, or 0.57%.

Among others, Visa declined 3.1% as the world’s largest payments processor’s tepid current-quarter revenue growth forecast eclipsed an earnings beat.

Data-storage products maker Western Digital fell 4.4% following a bigger-than-expected quarterly adjusted loss.

Of the S&P 500 companies that have reported earnings so far, 82% have surpassed expectations, LSEG data showed on Thursday, compared with a long-term average beat rate of 67%.

Tesla rebounded 0.8% in early trade after the electric-vehicle-maker’s market value dropped below Eli Lilly and was just above Broadcom on Thursday.

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