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U.S. equity futures powered higher Friday, paced by outsized gains for tech heavyweights Alphabet and Microsoft, as investors looked to a crucial inflation reading prior to the opening bell and maintain the market’s modest advance for the week.
Updated at 7:30 AM EDT
Fed up?
Lots of market chatter this morning tied to a Wall Street Journal piece that suggests “former Trump administration officials and other supporters of the presumptive GOP nominee” are drawing up plans to curb the Federal Reserve’s independence and put the President at the heart of future policy decisions.
The Fed first gained its independence from the Treasury through the “Treasury-Fed Accord” in 1951, with President Harry Truman appointing Assistant Treasury Secretary William McChesney Martin as the first independent Chair.
Donald Trump’s allies are quietly drafting proposals that would attempt to erode the Federal Reserve’s independence if the former president wins a second term https://t.co/iynLbjsHgx
— Jared Malsin (@jmalsin) April 26, 2024
Stock Market Today
Stocks closed lower Thursday, with the S&P 500 sliding around 0.5%, after Commerce Department data showed a slowdown in first quarter GDP, which was estimated at 1.6%, with a notable spike higher in underlying inflation pressures.
The data triggered another pushback on bets that the Federal Reserve would unveil its first interest rate reduction later this year. The CME Group’s FedWatch now suggests no more than a 44% chance at any of the central bank’s autumn meetings.
Related: U.S. growth slowdown, with inflation spike, raises early stagflation risks
Tech earnings after the close, however, are likely to reverse those declines heading into the final day of the trading week and into the close of the month.
Alphabet (GOOG) soared in overnight trading after the Google parent posted better-than-expected first quarter earnings, a solid AI-related outlook and unveiled its first-ever dividend.
The stock’s 11.6% gain, in fact, could pull the tech giant past the $2 trillion valuation mark if it holds into the open.
Microsoft (MSFT) shares were also on the move, rising 4% in premarket trading, after the world’s most-valuable company topped Wall Street forecasts for its fiscal third quarter, while estimating solid gains for its cloud computing division over the three months ending in June.
Fed Chairman Jerome Powell has asked markets for “patience” in seeking the central bank’s first rate cut as inflation pressures in the world’s biggest economy remain elevated.
On the downside, chipmaker Intel (INTC) slumped 7.3%, a move that would extend the stock’s 2024 decline to around 35%, after the chipmaker posted softer-than-expected first-quarter earnings and a muted revenue outlook.
ExxonMobil (XOM) shares slid 1.9% after the oil major posted softer-than-expected first-quarter earnings of $2.06 per share, thanks in part to weakening refining margins. Smaller rival Chevron (CVX) was little changed after it beat Wall Street profit forecasts thanks to higher production volumes.
The big tech gains, however, are likely to provide a solid boost for the Nasdaq, which is up 2.15% for the week, with futures suggesting a 193 point gain for the tech-focused benchmark.
The broader S&P 500, which is up 1.64% for the week, is called 39 points higher, with the Dow Jones Industrial Average priced for a 40 point advance.
Investors will first have to navigate a key inflation reading prior to the opening bell, with the Bureau of Economic Analysis publishing its March PCE inflation report on Friday, April 26.
Analysts are looking for core and headline readings of 2.6%, down from 2.8% and 2.5% respectively over the month of February. Any faster reading, tied in part to the underlying pressures seen in this week’s GDP data, could quickly reverse early market gains.
Benchmark 2-year Treasury note yields were holding steady at 4.991% heading into the start of the New York trading session, with 10-year notes pegged at 4.690%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.06% higher at 105.667.
More Wall Street Analysts:
Analyst unveils new Nike price target ahead of big summer for sportsAnalysts weigh in on Google-parent Alphabet’s stock after cloud eventAnalysts revamp Disney stock price target after proxy fight
In overseas markets, Europe’s Stoxx 600 was marked 0.62% higher in early Frankfurt trading, following the biggest earnings week of the year, while Britain’s FTSE 100 rose 0.33% in London.
Overnight in Asia, the Bank of Japan left its key policy rates unchanged following a two-day meeting in Tokyo, but lifted its inflation forecast for the current financial year to 2.8% from 2.4%.
The Nikkei 225 closed 0.81% higher on the session as the yen remained pinned to a 1990 low of 156.76 against the U.S. dollar, and tech stocks led the session gains. The regionwide MSCI ex-Japan benchmark rose 0.79% into the close of trading.
Related: Veteran fund manager picks favorite stocks for 2024
