U.S. stock futures edged lower Friday, with the three main indexes on track for their worst week since November, while investors awaited key inflation data for greater clarity on the Federal Reserve's rate-cut outlook.

The Consumer Price Index report for January is due at 8:30 a.m. ET and is likely to show prices rising at a steady pace.

The data lands two days after a stronger-than-expected jobs report heightened concerns that the Fed could keep interest rates on hold longer.

Even so, Fed fund futures reversed most losses, with markets pricing a 70% chance of a June rate cut and a total 60 basis points of easing this year.

"Markets are still expecting further rate cuts under a new Fed chair, but stronger data like the jobs report on Wednesday has led to a bit more doubt as to whether that's still possible," said analysts at Deutsche Bank.

"Another hawkish print today would further push in that direction."

The S&P 500 and the Dow had dropped more than 1% on Thursday, while the tech-heavy Nasdaq slipped 2%. The AI-led selloff rippled beyond software stocks to sectors such as brokerages and trucking on Friday.

At 8:24 a.m. EST, Dow E-minis fell 160 points, or 0.32%, S&P 500 E-minis were down 27.75 points, or 0.41%, and Nasdaq 100 E-minis lost 137.50 points, or 0.56%.

Applied Materials shares jumped 11.2% in premarket trading after the chipmaking-equipment firm forecast second-quarter revenue and profit above Wall Street expectations.

Peers Lam Research and KLA gained 1.4% and 0.8%, respectively.

With earnings season more than halfway through, AI capex outlays emerged as a dominant theme for the "Magnificent Seven" companies, whose cumulative investments are projected to reach about $650 billion.

Investors are now demanding real payoffs as they continue to punish sectors they fear could be squeezed by growing competition.

"The central question for equity investors is whether today's surge in capex can translate into durable earnings growth sufficient to justify higher leverage and stretched valuations," Bob Savage, BNY's head of markets macro strategy, said in a note.

Chip leader Nvidia's earnings later this month will be the next big test for the AI trade.

Networking equipment provider Arista Networks gained 11.2% on the day after forecasting annual revenue above expectations.

While most software names were steady, AppLovin extended steep losses from the previous session — the stock's biggest one-day decline since March — after being swept up in the AI-driven rout.

On the trade front, the United States and Taiwan signed a final reciprocal agreement that confirmed a 15% levy for imports from Taiwan, while committing to eliminate or lower tariffs on nearly all U.S. goods.

U.S. President Donald Trump plans to scale back some tariffs on steel and aluminum goods, the Financial Times reported, citing people familiar with the matter.

Nucor slipped 3.9%, Cleveland-Cliffs fell 2.7% and Steel Dynamics lost 5%.

Aluminum producers Alcoa and Century Aluminum declined 5% and 11.5%, respectively.