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U.S. equity futures moved lower again Friday, while the dollar tested multi-month highs against its global peers, as investors looked to the start of the first-quarter earnings season while tracking changes in Federal Reserve interest rate forecasts.

Stocks ended higher Thursday as markets clawed back the week’s earlier losses following a muted reading for factory-gate inflation, which alongside CPI inflation figures feeds into the Federal Reserve’s preferred PCE Price Index.

Traders are still betting that the Fed will unveil its first rate cut later this year, likely in September, but have pared bets on the total number of reductions to just two, down from as many as six in early January, as inflation levels remain firmly above the Fed’s 2% target.

Boston Fed President Susan Collins, speaking at an event hosted by the Economic Club of New York, said rate cuts are still part of her baseline projections for this year. But she noted that “recent data suggest it may take more time than I had previously thought to gain greater confidence in inflation’s downward trajectory, before beginning to ease policy.” 

Kansas City Fed President Jeffrey Schmid, San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic are slated to speak later in the day.

Benchmark 10-year note yields, which hit an early November high of 5.57% earlier this week, were last marked at 4.538% while 2-year notes were pegged at 4.924%.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.51% higher at a five-month high of 105.816.

Bank earnings key

Bank earnings are likely to take center stage in today’s trading, with first-quarter updates from three of the country’s biggest lenders: JPMorgan, Citigroup  (C)  and Wells Fargo  (WFC) .

JPMorgan  (JPM)  shares were down 3.5% in early trading after the bank reported stronger-than-expected first-quarter earnings but noted a sequential decline in net interest income and issued a cautious outlook statement from CEO Jamie Dimon.

Related: JP Morgan shares tumble as key Q1 earnings metric disappoints Wall Street

The financials sector is key to this year’s first-quarter earnings season and is forecast to contribute around 18% of the S&P 500’s $457 billion in profits, second only to the information technology sector.

Heading into the start of the trading day on Wall Street, futures tied to the S&P 500 suggest a 22-point decline while those linked to the Dow Jones Industrial Average are priced for a 116-point opening-bell dip 

The tech-focused Nasdaq, meanwhile, is priced for a 100-point opening-bell decline amid a broader slump in chip stocks. That’s tied to a Wall Street Journal report that China has ordered its largest telecoms carriers to phase out the use of foreign-made semiconductors.

Intel  (INTC)  shares were marked 1.94% lower at $36.90 while Advanced Micro Devices  (AMD)  shares slipped 1.8% to $167.47. Nvidia  (NVDA)  was also in the red, falling 0.64% to $900.40.

In overseas markets, the regionwide Stoxx 600 was marked 0.95% higher in midday Frankfurt trading following yesterday’s dovish policy meeting at the European Central Bank. The ECB teed up the first rate cut in more than a year for later in June.

More Wall Street Analysts:

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• Analysts weigh in on Google-parent Alphabet’s stock after cloud event
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Overnight in Asia, the surging U.S. dollar pulled the yen to a record low 153.34, setting up the potential for currency-market intervention over the coming weeks. The Nikkei 225 ended 0.21% lower in Tokyo.

Broader Asia stocks were also in the red, with the MSCI ex-Japan index falling 1.14%, following weaker-than-expected trade data from China. The report showed a surprise slump in both imports and exports for the month of March. 

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