Stock futures point to positive finish for volatile week on Wall Street

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
 rose 182 points, or 0.7%, to 27,608, while S&P 500 futures
 gained 26.90 points, or 0.8%, to trade at 3,357. Nasdaq-100 futures
 were up 88.75 points, or 0.8%, at 11,254.25.

The Dow
 on Thursday fell 405.89 points, or 1.5%, to close at 27,534.58, while the S&P 500
 ended with a loss of 59.77 points, or 1.8%, at 3,339.19. The Nasdaq Composite
 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?

“While monetary policy is set to remain supportive for several more quarters, valuations are high across assets and volatility is resurfacing. 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,” said Elia Lattuga, co-head of strategy research at UniCredit Bank, in a note.

Stocks were unable Thursday to follow through 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.

Analysts said weakness on Thursday was tied in part to the inability of U.S. politicians to agree on a new coronavirus rescue package. Democrats blocked a Republican bill on the Senate floor Thursday, leaving the way forward unclear, lawmakers 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 for the large-cap, tech-related stocks that had led the rally significantly stretched. Among those highfliers, shares of Apple Inc.
 and Netflix Inc.
 were on track for weekly declines of more than 6%, while Facebook Inc.
 is off more than 5%.

The 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.
     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.
    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
 rose 0.4 basis point to 0.687%. Bond prices move inversely to yields.

The ICE U.S. Dollar Index
which tracks the performance of the greenback against its major rivals, fell 0.2%.

Gold futures
were off 0.6%, threatening to snap a three-day winning streak. The U.S. crude oil benchmark

 rose 7 cents, or 0.2%, to $37.37 a barrel.

The Stoxx Europe 600 index
 was little changed, while the U.K.’s benchmark FTSE
rose 0.4%. In Asia, Hong Kong’s Hang Seng Index
and the Shanghai Composite Index
 both rose 0.8%, while Japan’s Nikkei
rose 0.7%.

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