Stock-index futures pointed to a higher start for U.S. equities Friday as investors looked to close out a volatile, holiday-shortened week that has the tech-heavy Nasdaq Composite on track for its biggest weekly loss since the height of the pandemic-induced market selloff in March.
How are major benchmarks trading?
Futures on the Dow Jones Industrial Average YM00, +0.56% rose 182 points, or 0.7%, to 27,608, while S&P 500 futures ES00, +0.80% gained 26.90 points, or 0.8%, to trade at 3,357. Nasdaq-100 futures NQ00, +1.02% were up 88.75 points, or 0.8%, at 11,254.25.
The Dow DJIA, -1.45% on Thursday fell 405.89 points, or 1.5%, to close at 27,534.58, while the S&P 500 SPX, -1.75% ended with a loss of 59.77 points, or 1.8%, at 3,339.19. The Nasdaq Composite COMP, -1.99% fell 221.97 points, or 2%, to finish at 10,919.59. Through Thursday, the Dow was down 2.1% for the week, while the S&P 500 was off 2.6% and the Nasdaq was 3.5% lower; markets were closed Monday for Labor Day.
What’s driving the market?
A decline in the S&P 500 index for the week would mark the benchmark’s first back-to-back weekly drop since May.
“While monetary policy is set to remain supportive for several more quarters, valuations are high across assets and volatility is resurfacing,” said Elia Lattuga, co-head of strategy research at UniCredit Bank, in a note. “The breadth of the rally is still limited and the recovery uneven – hence developments in the economic outlook and political risks represent significant threats to risk appetite.”
Stocks were unable to follow through Thursday on a Wednesday bounce that saw equities recover somewhat from a three-day, tech-led rout that pushed the Nasdaq into correction territory, falling more than 10% from its record close set last week.
Weakness on Thursday was partly tied to the inability of U.S. politicians to agree on a new coronavirus rescue package after Democrats blocked a Republican bill on the Senate floor, leaving the way forward unclear, analysts said.
Meanwhile, investors have fretted that the sharp rally that took stocks from their March pandemic lows to new all-time highs had left valuations significantly stretched for the large-cap, tech-related stocks that had led the rally this year. Among those highfliers, shares of Apple Inc. AAPL, -3.26% and Netflix Inc. NFLX, -3.90% were on track for weekly declines of more than 6%, while Facebook Inc. FB, -2.05% is off more than 5%.
The U.S. August consumer price index is due at 8:30 a.m. Eastern, economists surveyed by MarketWatch, on average, forecast a 0.3% rise, while CPI excluding food and energy is expected to see a 0.2% increase. Consumer prices jumped by 0.6% according to both measures in July.
Federal budget figures for August are due at 2 p.m. Eastern.
Which companies are in focus?
- Shares of Oracle Corp. ORCL, +0.66% were up more than 4% in premarket trade after the database software company late Thursday reported fiscal second-quarter results and an outlook that exceeded Wall Street estimates.
- Peloton Interactive Inc. PTON, -3.75% shares rose more than 11% ahead of the bell after reporting late Thursday its first quarterly profit as a public company alongside record revenue.
What are other markets doing?
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.687% rose 0.4 basis point to 0.687%. Bond prices move inversely to yields.
The ICE U.S. Dollar Index DXY, -0.14%, which tracks the performance of the greenback against its major rivals, fell 0.2%.
The Stoxx Europe 600 index SXXP, +0.21% was little changed, while the U.K.’s benchmark FTSE UKX, -0.26% rose 0.4%. In Asia, Hong Kong’s Hang Seng Index HSI, +0.78% and the Shanghai Composite Index SHCOMP, +0.78% both rose 0.8%, while Japan’s Nikkei NIK, +0.73% rose 0.7%.