US Markets

Wall Street seen higher after Thursday's 5-week low

U.S. stock index futures held mild gains on Friday, after a report showed inflation remained benign last month.

The Labor Department reported producer prices fell for a third straight month in November, illustrating a lack of inflation that could be a factor in decisions by the Federal Reserve as it considers whether to start reducing its monthly bond purchases.

Fears the Federal Reserve could start scaling back its massive bond-buying when it meets next week will continue to weigh on markets. The Dow fell to a five-week low on Thursday after upbeat retail sales data raised expectations of an imminent taper.

(CNBC explains: Tapering)

The odds on a late-2013 taper have also risen since the Republican-led House of Representatives passed a two-year budget plan on Thursday evening. If the deal goes through the Democrat-controlled Senate next week it will provide for government spending into 2015, removing the threat of another shutdown before next year's congressional elections.

Asian shares traded mixed early on Friday on tapering concerns, while European shares crept higher.

(Read more: Track European markets live)

"The U.S. data this month, the budget deal passed in the House yesterday and the relatively favorable financial market conditions compared to the summer are all strong arguments for tapering to get underway next week," said Bank of Tokyo-Mitsubishi's Derek Halpenny in a research note.

"Budget uncertainties were a big factor in our 2014 taper call and hence the risks of tapering next week have risen considerably."

In the meantime, the Fed is due to purchase $1.25-$1.75 billion of 23-30-year Treasury notes on Friday.

Other data out during the day include construction output figures for October. Having posted a second successively quarterly rise between July and September, construction looks set to have clocked up solid gains at the start of the fourth quarter.

Stocks worth watching on Friday include Bank of America, which has agreed to pay $131.8 million to settle Securities and Exchange Commission charges that its Merrill Lynch unit misled investors about mortgage-backed securities.

(Read more: BofA's Merrill pays $132 million in mortgage probe)

—By CNBC's Katy Barnato