Nasdaq to lead US stocks lower as markets eye inflation, growth data

• Oil prices surged due to US military buildup in the region amid Iran tensions, while gold rose on defensive positioning
• Deutsche Bank forecasts Q4 GDP growth at 2.5% annualized (below consensus 2.8%) and core PCE inflation accelerating to 0.4% from 0.2% in November
• Upcoming PCE data expected to reinforce market expectations that the Federal Reserve will maintain current interest rates

Market Summary: US Stocks Eye Inflation and Growth Data

Market Movement:

US stock futures declined Friday morning, with Nasdaq contracts down 0.2%, followed closely by Dow Jones and S&P 500 futures. This continues Thursday's negative session where the Dow fell 0.5% and both the S&P 500 and Nasdaq dropped 0.3%.

Key Driver - Geopolitical Tensions:

Market weakness stems from escalating US-Iran tensions, with the US reportedly amassing forces in the region. The situation has pushed crude oil prices up 18.5% year-to-date, while defensive asset gold also rallied. Iran's strategic position regarding oil transportation presents potential supply disruption risks.

Critical Economic Data Releases:

Investors await two major data points scheduled for 8:30am EST:

• GDP Growth: Deutsche Bank forecasts Q4 real GDP growth at 2.5% annualized (consensus: 2.8%), down from Q3's robust 4.4% pace
• Core PCE Index: Expected to accelerate to 0.4% in December from 0.2% in November, slightly above consensus

The Personal Consumption Expenditures (PCE) index is particularly significant as the Federal Reserve's preferred inflation gauge and could reinforce expectations for interest rates to remain on hold.

Market Implications:

The combination of geopolitical uncertainty and upcoming economic data creates a cautious trading environment. Rising oil prices pose inflationary risks while potentially slower GDP growth suggests economic momentum may be cooling. The data releases will provide crucial direction for markets and Fed policy expectations. Analysts note ongoing debate about whether White House rhetoric represents serious military intervention possibilities or negotiating tactics.