As the slips from the record highs seen earlier in the week, with retail stocks dragging on the index, here are the three things that Erin Gibbs, equity chief investment officer at S&P Global, is looking for on Friday.
1. Inflation update
A key economic data point is on tap for Friday morning, when the consumer price index will give the latest read on inflation. While the level of inflation is always important for markets, it is especially relevant now, given that the Federal Reserve is in the midst of raising rates in order to stanch potential inflation. The Fed has a stated inflation target of 2 percent.
The release will provide "a good indicator of whether we're still going to hit that 2 percent inflation that's so important for the Fed," and thus will shed light on "whether they may raise rates either earlier or later in the year," Gibbs said Thursday on CNBC's "Trading Nation."
The producer price index for final demand came in a touch hotter than expected on Thursday, showing that prices rose 0.4 percent month over month. Tom Porcelli, chief U.S. economist at RBC Capital Markets, wrote in a Thursday note that the PPI report "suggests upside risk" for CPI.
The consensus estimate is that the CPI report shows a month-over-month gain of 0.2 percent in consumer prices, and a year-over-year increase of 2.3 percent, according to FactSet.
2. Retail sales
Another significant economic release on Friday morning will be the retail sales number, Gibbs said.
Given the well-publicized pain for brick-and-mortar retail companies, a key question presents itself: "Is the U.S. consumer still purchasing retail goods and just buying them online, or have spending patterns changed to focus more on entertainment?" Gibbs wrote to CNBC.
Economists as a group expect to see 0.6 percent month-over-month growth in retail sales for April, after a 0.2 percent drop in March.
3. Big box retailers
Speaking of retail sales, Gibbs will continue to keep an eye on how big box retail shares act.
After a tough week for the group, "we want to see on Friday if they're going to have a bounce back, or if we're going to see this continued decline."
Macy's shares got hit especially hard on Thursday, falling 17 percent after the company reported a serious decline in same-store sales along with a spike in inventory.
Nordstrom's Thursday afternoon earnings report is unlikely to help matters; the department store company appeared to beat earnings