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U.S. equity futures moved lower, but are still on pace for modest weekly gains, as investors move past Nvidia’s third quarter earnings report and focus on geopolitical and economic risks that could test the market’s broader rally into the final weeks of the year.
Stocks closed higher on Thursday, helped in part by steady Treasury bond yields and a modest advance for Nvidia (NVDA) following its October-quarter update and near-term outlook, with the S&P 500 rising around 0.53% and the Dow gaining 462 points.
Friday’s moves, however, will likely be dictated in early trading by events overseas, where the escalation conflict between Russia and Ukraine continues to weigh on investor sentiment and a reading of economic activity around Europe slumped to the lowest levels in ten months.
Europe’s weakening economy has investors betting on an outsized rate cut from the European Central Bank next month in Frankfurt.
The HCOB PMI reading for November came in well south of the 50 point mark that separates growth from contraction, adding to the region’s broader economic malaise and lifting bets on an outsized 50 basis point rate cut from the European Central Bank next month in Frankfurt.
That’s pushing the euro to a near two-year low of 104.251 against the U.S. dollar, and taking the dollar index to a multi-year high of 107.422 in overnight trading.
“The index has climbed over 2% this month, adding to the nearly 3% jump last month, amid escalating geopolitical concerns in Europe and widening yield and interest rate gaps favoring the greenback,” Saxo Bank strategists wrote.
Related: Nvidia earnings adjust chances for S&P 500 record year
Safe-have flows are holding Treasury yields in place, however, with 10-year notes pegged at 4.392% and 2-year paper trading at 4.328% heading into the start of the New York session.
Gold prices are also on the move, with the bullion on pace for its best weekly gain of the year and last marked 1.42% higher at $2,707.30 per ounce.
Heading into the start of the trading day on Wall Street, stocks are set for a modest opening bell pullback with futures tied to the S&P 500 suggesting a 13 point opening bell decline.
Futures tied to the Dow Jones Industrial Average, meanwhile, are priced for an 85 point dip while those linked to the tech-heavy Nasdaq are called 75 points lower.
More Wall Street Analysts:
Walmart analysts reset stock price targets ahead of Black FridayAnalysts revamp Cisco stock price targets after earningsAnalysts revisit Applied Materials stock price targets after Q4 earnings
In overseas markets, Europe’s Stoxx 600 pared earlier gains following the PMI data and was last marked 0.3% higher in mid-day Frankfurt trading. Britain’s FTSE 100, meanwhile, rose 0.74% as the pound fell to a six-month low of 1.2521 against the surging U.S. dollar.
Overnight in Asia, the regional MSCI ex-Japan benchmark rose 0.17% into the close of trading, while the Nikkei 225 added 0.68% in Tokyo, but still ended 0.93% lower for the week.
Related: Veteran fund manager sees world of pain coming for stocks
