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U.S. equity futures moved higher in early Friday trading, while Treasury yields and the dollar held steady, as investors looked to close out a challenging month on Wall Street with a focus on Federal Reserve interest rate cuts that could extend the summertime rally into the back end of the year.
Stocks ended mixed Thursday, with the Dow adding more than 200 points on the session to close at a record, powered in part by solid post-earnings gains for Salesforce (CRM) .
The S&P 500 and the Nasdaq were little changed as investors picked through details of Nvidia’s (NVDA) highly anticipated fiscal-second-quarter update and its implications for the broader AI-investment thesis.
Markets were also buoyed by a better-than-expected reading for second-quarter GDP, which the Commerce Department upgraded to 3%. The move was thanks in part to a surprise surge in consumer spending and to a modest pullback in weekly jobless claims, which could suggest some late-cycle resiliency in the labor market.
Focus for the Friday session and ahead of the Labor Day holiday weekend will likely be the release of the Federal Reserve’s preferred inflation gauge, the PCE Price Index, prior to the the start of trading.
Market focus is likely to shift back to the Fed and its near-term interest-rate path with inflation data on deck and a host of jobs figures due next week.
Economists expect the report to show modest upticks in both the core and headline readings for the month of July, but not to a level that would call into question the central bank’s signaling on near-term interest-rate cuts.
CME Group’s FedWatch continues to point to around 100 basis points (1 percentage point) of Fed easing between now and the end of the year, with the odds of an outsized 50-basis-point reduction in September pegged at 33%.
Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is up 1.26% for the month and 2.41% for the quarter, are indicating an opening bell gain of around 22 points.
Futures tied to the Dow, meanwhile, suggest an 80-point gain from last night’s close, with the Nasdaq called 130 points higher.
Benchmark 10-year Treasury note yields were little changed at 3.856%, with 2-year notes pegged at 3.906% heading into the start of the New York trading session and the PCE inflation data at 8:30 a.m. U.S. Eastern Time.
Related: Housing market seeks Fed rate relief as sales slump and prices leap
Stocks on the move include Dell Technologies (DELL) , which jumped more than 5.8% to $117.15. The group said demand for AI-focused servers, tied to Nvidia chips, helped it top quarterly earnings forecasts and boost its full-year profit outlook.
Lululemon Athletica (LULU) was also moving higher, rising 4.24% in the premarket even as the upscale athletic clothing retailer trimmed its full-year sales forecast amid increasing competition and an anticipated pullback in consumer spending.
In overseas markets, Europe’s Stoxx 600 extended its winning streak to a fourth week. The regional benchmark hit an all-time high in Frankfurt after data showed Eurozone inflation fell to the lowest level in three years, paving the way for more European Central Bank rate cuts.
More Wall Street Analysts:
Analysts reboot Grand Theft Auto maker’s stock price targetAmerican Express stock analyst flags concerning shift in consumer behaviorAnalyst resets Nvidia stock price target before earnings
Overnight in Asia, the Nikkei 225 ended the week 0.74% higher at 38,647.75 points, a move that nudged the benchmark into positive territory for the month.
The regionwide MSCI ex-Japan benchmark, meanwhile, rose 0.6% into the close of trading, with broader Asian shares rising for a fourth consecutive month.
Related: Veteran fund manager sees world of pain coming for stocks
