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U.S. equity futures moved firmly higher in early Friday trading, powered by gains for megagap tech stocks tied to the AI investment demand story, as markets look to close out the week on a high note heading into a crucial Federal Reserve rate decision prior to the Christmas break.
Stocks ended lower across the board Thursday, with the Nasdaq leading the broader market decline, as investors parsed details of a mixed producer price inflation report and a big jump in weekly jobless claims.
A tepid auction of 30-year bonds, meanwhile, accelerated the biggest weekly mover higher in long-dated paper of the year as investors appear to be growing increasingly concerned over the trajectory of U.S. debt levels.
Benchmark 10-year notes were last trading at 4.334%, a 13 basis points increase on the week, with 2-year notes rising to 4.201% even as bets on a December rate cut were effectively cemented by the twin inflation reports from earlier in the week.
Bond markets are navigating a complex backdrop of growth, inflation and deficit figures into the end of the year, with longer-dated yields rising the most in a year this week.
Investors are also growing concerned about the lack of market breadth into the final weeks of the year, as the number of advancing stocks is being outpaced by the number of those in decline for a 9th consecutive session, one of the longest such streaks in two decades.
Tech stocks are back in the drivers’ seat again Friday, however, following a stronger-than-expected quarterly report from chipmaker Broadcom (AVGO) that looks to have added further heft to the AI investment trade.
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Futures contracts tied to the Nasdaq suggest a 150 point opening bell gain, with premarket advances for Nvidia (NVDA) , Tesla (TSLA) and Advanced Micro Devices (AMD) .
The S&P 500, meanwhile, is called 22 points higher while the Dow Jones Industrial Average is priced to claw back around 100 points from last night’s slump.
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In overseas markets, Britain’s FTSE 100 was little-changed in mid-day London trading following data showing the domestic economy had contracted for a second consecutive month, adding to bets on an end-of-year rate cut from the Bank of England.
Overnight in Asia, the Nikkei 225 fell 0.95% into the close, following on from last night’s pullback on Wall Street, but still held onto a 1.94% gain for the week.
A lack of policy and stimulus detail from the Central Economic Work Conference, meanwhile, pulled China stocks into the red, with the Hang Seng index falling 2.1% and the regional MSCI ex-Japan benchmark down 0.57% into the close of trading.
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