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U.S. equity futures nudged higher in early Friday trading, with investors closely tracking moves in the bond market, as stocks continue to test all-time highs amid a bullish mix of solid economic data and impressive corporate earnings.
The Dow Jones Industrial Average recorded its fourth record close of the last five sessions last night, after rising by 161 points on the session to lead gains for the three major benchmarks.
The S&P 500, which saw its gains for the session fade amid another leg higher in Treasury bond yield tied in part to stronger-than-expected retail sales data an a big decline in weekly jobless claims, remains tantalizingly close to the 6,000 point mark as it rides a third quarter gain of around 1.4%.
Stocks could book further gains into the close of the week, with an eye on next week’s busy earnings slate, following the unveiling of a major round of economic stimulus in China aimed at meeting the government’s full-year GDP growth targets.
Solid economic growth and stubborn inflation data has investors rethinking their bets on Fed rate cuts into the end of the year.
China’s economy grew at a 4.6% clip over the third quarter, the slowest pace of gains in more than a year, and its housing market is suffering one of its worst slumps since 2015.
Stimulus news boosted overseas stocks, with benchmarks in China rising more than 3.5% and the regional MSCI ex-Japan benchmark rising 1.52% into the close of trading.
On the flip side, another move higher in Treasury yields, which have risen around 50 basis points since the Federal Reserve’s September rate cut, could blunt equity market performance as investors worry over a resurgence in inflation and the political risks tied to a deadlocked Presidential election.
Related: Bond markets are heaving as Fed interest rate bets swing
Benchmark 10-year Treasury note yields were last marked at 4.097%, close to the cycle high of 4.106%, while 2-year notes were trading at 3.969% heading into the start of the New York session.
On Wall Street, futures contracts tied to the S&P 500 suggest a 9 point opening bell gain, with those linked to the Dow priced for a modest 10 point bump.
The tech-focused Nasdaq, meanwhile, is called xx points higher.
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Netflix (NFLX) shares were a notable early mover, rising 5.6% to $687.65 each after the streaming media group topped third quarter earnings forecasts and added a better-than-expected 5 million new subscribers over the three months ending in September.
Nvidia (NVDA) , meanwhile, extended its recent run of gains, following its fresh all-time high yesterday tied to the stronger-than-expected earnings and outlook from chip contractor Taiwan Semiconductor (TSM) .
Related: Veteran fund manager sees world of pain coming for stocks
