US stocks pulled back from record highs before the bell on Friday as Wall Street readied for an update on consumer inflation that will feed into expectations for interest-rate cuts.

Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both fell about 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the retreat, down 0.5%.

Markets are bracing for an update on consumer inflation, after signs of a resilient economy helped lift the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) to new all-time highs on Thursday.

Eyes are firmly on the July reading of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures index, for insight into the pace of rate cuts.

Bets that the Fed will ease at its September meeting have risen since Chair Jerome Powell opened the door at Jackson Hole, with traders now pricing in an 85% chance of a quarter-point cut. On Thursday, Governor Christopher Waller said he "fully expects" more easing to follow in coming months, amid cracks in the labor market.

Economists expect annual "core" PCE — which leaves out volatile food and energy prices — to come in at 2.9% in the data, slated for release at 8:30 a.m. ET. The monthly core reading is seen as holding steady at 0.3%.

The Fed-favored report caps a rocky week for markets gripped by Nvidia (NVDA) earnings and President Trump's effort to oust its governor Lisa Cook, which took a new turn.

But Wall Street stocks are still on track for small weekly wins, with more solid monthly gains in sight as they hold their ground in record territory. The S&P 500 eyed a 2.6% gain for August after crossing 6,500 for the first time, while the Dow was poised for a rise of about 3.5%. Meanwhile, the Nasdaq Composite (^IXIC) is looking at a 2.8% bump for the month.

Here's a look at some of the top stocks trending in premarket trading:

Dell Technologies (DELL) stock fell 6% in premarket trading as a as a gloomy quarterly profit forecast and weaker-than-expected second-quarter margin rate overshadowed upbeat full-year estimates.

Affirm (AFRM) shares soared 15% before the bell after the company turned a profit in its fourth quarter fiscal earnings and exceeded both earnings and revenue estimates.

Alibaba (BABA) stock rose more than 2% before the bell on Friday after reporting a surge in revenue from China’s AI boom, helping offset a surprise drop in profit tied to a worsening battle with Meituan (3690.HK, MPNGY) and JD.com Inc. (JD) in internet commerce.

Marvell Technology (MRVL) stock tumbled almost 13% in Friday's premarket trading after the chipmaker's forecast for data-center-related demand fell short of high expectations.

Wall Street has been betting that cloud giants such as Microsoft (MSFT) and Amazon (AMZN) would clamor for chips customized for AI workloads.

Reuters reports:

Investor expectations for AI-focused chipmakers have been elevated, but recent results have shown signs of a cooling market. Nvidia's (NVDA) latest earnings beat forecasts, but its data center growth slowed and shares fell post-report. Peer Broadcom (AVGO) has yet to report.

Marvell's reliance on so-called custom application-specific integrated circuits exposes it to customer inventory-led swings in demand.

CEO Matthew Murphy said on a post-earnings call on Thursday that data center revenue in the third quarter will be flat on a sequential basis, but did not elaborate on the source of the weakness.

Murphy said \\"lumpiness\\" was normal when large cloud compute providers build out infrastructure.

\\"We aren't surprised at lumpiness, but we are surprised that the ASIC (chips business) full year (revenue) continues to fall,\\" Morgan Stanley analysts said.

Read more here.

Christopher Waller has signaled he wants the Federal Reserve to start lower interest rates with a quarter-point cut in September, with more easing to follow in the months after.

The Fed governor stepped up his call to reduce short-term borrowing costs as President Trump ramps up pressure on the central bank in a push for rate cuts. Waller is said to be under consideration by Trump to replace Jerome Powell when the Fed chair likely steps down next year.

Reuters reports:

\\"While there are signs of a weakening labor market, I worry that conditions could deteriorate further and quite rapidly, and I think it is important that the FOMC not wait until such a deterioration is under way and risk falling behind the curve in setting appropriate monetary policy,\\" Waller told the Economic Club of Miami on Thursday.

Waller said he did not think the Fed would need to cut rates more than a quarter point next month, though he said that view could change if the Labor Department's August jobs report, due out next Friday, points to a substantially weakening economy, and inflation remains well-contained.

However, he said \\"the time has come to ease monetary policy and move it to a more neutral stance,\\" which he said was around 3%, some 1.25 to 1.50 percent points below the current policy rate range of 4.25%-4.50%.

\\"I don't believe that policy has fallen substantially behind the curve, but one way to signal that I don't intend to allow that happen is to talk about where we go after September,\\" he said. \\"As I stand here today, I anticipate additional cuts over the next three to six months, and the pace of rate cuts will be driven by the incoming data.\\"

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Chinese stocks capped another strong week of gains, intensifying a debate over the fate of a rally that’s defied the nation’s economic troubles to add $1.3 trillion in market value just this month.

Bloomberg reports:

Turnover for the onshore market climbed to a record this month as the benchmark CSI 300 Index (000300.SS) rose for nine of the past 10 weeks. That’s despite words of caution from Chinese state media and moves by some brokerages and fund managers to cool things down.

Bullish investors are expressing confidence that authorities will keep sentiment supported before the Sept. 3 military parade, which is set to mark the 80th anniversary of the end of World War II. China has a history of propping up its stock market ahead of major political events to project an image of stability. Bears, meanwhile, are pointing to overstretched technical indicators and high margin-financing levels.

“Animal spirits have burst out in China’s market, with traders piling into everything from chips to Labubu,” said Hebe Chen, an analyst at Vantage Markets in Melbourne. “The upcoming parade is fanning the frenzy, acting as a psychological safety net much like Chinese New Year or National Day, when authorities are expected to keep skies — and sentiment — clear.”

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Gold (GC=F) has seen consecutive weeks of gains to push back towards records set in April. Fears around the Fed's independence and the upcoming inflationary report have made the precious metal an attractive prospect to investors seeking stability.

Bloomberg reports:

Bullion was steady early Friday in Asia at around $3,415 an ounce, after data on Thursday showed the US economy expanded faster than expected. The figures raised concerns about inflation ahead of Friday’s US personal consumption print, which is forecast to accelerate. That could limit the Federal Reserve’s ability to cut rates — a scenario that would typically pose a headwind for gold, as it doesn’t pay interest.

Traders were also weighing comments on Thursday from Fed Governor Christopher Waller — a key contender to succeed Jerome Powell as Fed Chair next year — who said he would support a quarter-percentage point reduction in September and anticipates additional cuts over the next three to six months.

Swaps markets see around an 85% chance of a rate cut next month, though beyond September there’s a high degree of uncertainty over how inflation and the US labor market will evolve as the impact of President Donald Trump’s tariffs feed through to the economy.

Read more here.