US stocks opened in green on Friday after oil prices displayed some sign of easing, and officials from the Trump administration signalled that the Strait of Hormuz blockade will not be a long-term problem.
The Dow Jones Industrial Average climbed 301 points, or 0.7%, while the S&P 500 added 0.5%, with the Nasdaq Composite also moving higher.
The slight optimism in the Wall Street sentiment came as the traders went through the Fed’s preferred inflation gauge, a key data point that could shape interest-rate expectations heading into spring.
The inflation test
The Bureau of Economic Analysis released its January Personal Consumption Expenditures (PCE) report on Friday, the Federal Reserve’s preferred gauge of inflation.
The data showed inflation remained sticky with core PCE, which strips out food and energy, rising 0.4% in January and 3.1% from a year earlier, slightly higher than December’s 3.0% reading.
Headline PCE increased 0.3% on the month and 2.8% year-over-year, easing slightly from 2.9% in December.
Friday’s inflation number comes in the backdrop of revised GDP estimates, which indicated that the US economy slowed sharply in the final months of 2025.
Gross domestic product, which measures the total value of goods and services produced in the US economy, expanded at a seasonally adjusted annual rate of 0.7% in the fourth quarter, data from the Bureau of Economic Analysis showed.
The revised figure was significantly lower than the earlier estimate of 1.4% and fell short of economists’ expectations of 1.5%.
It also represented a steep slowdown from the 4.4% growth recorded in the previous quarter.
What happened in pre-market trading?
The biggest stock movement came from Adobe stock as it declined over 8% in pre-market trading on Friday.
The pullback came as the company announced Thursday that CEO Shantanu Narayen will step down after 18 years at the helm.
Narayen, who joined Adobe in 1988 and became CEO in 2007, will stay in the role until a successor is found and will remain as board chair.
The investors didn’t like the uncertainity that comes with the decision, and that too in the middle of high competetion in the artificial intelligence space.
The second stock that declined sharply in the premarket was Ulta Beauty. The shares declined nearly 9% after its 2026 outlook fell short of expectations.
The beauty retailer faces a confluence of headwinds, including margin pressure, rising competition from e-commerce rivals, and the end of its royalty revenue stream from its Target partnership later this year.
Trade setup for Friday
Defense stocks are still drawing attention as Wall Street increasingly prices in a longer conflict in the Middle East.
Energy companies have been among the week’s strongest performers.
With the Fed’s preferred inflation report and oil continuing to dominate headlines, markets could see a volatile start before finding direction, if they manage to settle at all today.
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