S&P 500 Futures: Cautious sentiment test three-day run-up ahead of key US catalysts

S&P 500 Futures struggle to extend gains, wobble around intraday top.
US President Biden’s budget proposal, Yellen’s favor to Fed back risk-on mood.
Japan’s extension to virus-led emergencies and Victoria’s lockdown mostly ignored.
US PCE inflation data, budget release will be the key.

S&P 500 Futures stay firmer around 4,215, up 0.38% intraday, during early Friday. In doing so, the risk barometer cheers the hopes of further stimulus and fading inflation fears amid a quiet Asian session. However, cautious sentiment before US budget release and Core Personal Consumption Expenditure (PCE) Price Index for April probe the bulls.

Even if his $1.7 trillion infrastructure & spending bid is pending in the Parliament, US President Joe Biden pushes for a $6.0 trillion budget. To which, Republicans easily offer $1.0 trillion, per the New York Times (NYT). This suggests another round of long talks and no results putting the safe-haven bid under the US dollar.

Further, US Treasury Secretary Janet Yellen finally joined the chorus of Fed speakers that term inflation run-up as temporary, which in turn helps the market plays to stay positive. It’s worth mentioning that the recent reductions in the US inflation expectations also favor the risk-on mood.

While these two catalysts joined upbeat US data to favor the Wall Street benchmarks, firmer yields capped the gains the previous day.

Read: Wall Street Close: Trades mixed as strong T-bond yields probe bulls

Although the lack of catalysts help S&P 500 Futures to track Wall Street’s mild gains, the virus-led extension of emergencies in Japan and a snap lockdown in Victoria probe the optimists amid the pre-data caution.

Moving on, nothing matters more than the US Core PCE Price Index for April, expected 2.9% YoY versus 1.8% prior, as well as the US budget release. It should be noted that the Monday’s off in the US also highlights today to be the key day.

Read: US PCE inflation preview: Gold remains key asset to watch

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