Weak Q4 GDP and Hot December PCE Send S&P 500 Futures Down
S&P 500 futures fell 15 points premarket after Q4 GDP rose 1.4%, well below the 2.5% forecast. December personal consumption expenditures jumped 0.4% month-over-month and 2.9% year-over-year, while core PCE hit 3.0%, the highest since April.
1. Premarket S&P 500 Futures Decline
S&P 500 futures opened down 15 points after the preliminary Q4 GDP print of 1.4% fell short of the 2.5% expectation. This marks the second-lowest quarterly growth of 2025 and follows a 300-basis-point drop from Q3.
2. December PCE Inflation Accelerates
Personal Consumption Expenditures in December rose 0.4% month-over-month, doubling November’s pace. Headline PCE reached 2.9% year-over-year and core PCE climbed to 3.0%, topping the Fed’s 2.0% target and hitting the highest level since April.
3. Market Implications and Outlook
Elevated inflation and slower growth raise the odds of further Fed tightening, pressuring equity valuations. Investors will watch upcoming S&P PMI and New Home Sales data as well as the Supreme Court’s tariff ruling for additional market catalysts.