U.S. stock futures were modestly higher on Friday as investors positioned themselves ahead of a closely watched inflation reading that could shape the Federal Reserve’s next move on interest rates. Traders are looking for signs of whether price pressures are easing enough to give policymakers more room to hold steady or begin cutting rates later this year.

The report has become a focal point for markets, with inflation data often driving sharp moves in equities, bonds, and the dollar. A softer reading could support the view that the Fed’s tightening campaign has done enough to cool the economy, while a hotter figure may reinforce expectations that borrowing costs will stay elevated for longer.

Recent market trading has reflected a cautious but constructive tone, with investors weighing the outlook for growth against still-firm price pressures. Technology shares and other rate-sensitive sectors could see the biggest reaction if the data significantly shifts expectations for monetary policy.

For now, futures markets suggest traders are bracing for volatility rather than making a strong directional bet. The inflation release is likely to set the tone for the next phase of Wall Street trading and provide an important signal on how the Fed may approach its upcoming policy decisions.