Market sentiment appears to have improved following Thursday’s inflation-induced sell-off, with stock futures rising modestly early Friday. The earnings news was largely negative, potentially acting as a backlash. Bond yields are falling as traders continue to hold out hope that the Federal Reserve, led by Jerome Powell, would aim for an accommodative stance and signal rate cuts in upcoming meetings.
Traders may also scrutinize some key economic reports expected for the day with an eye to next week’s Fed meeting.
Takeaways from the previous session:
The much warmer-than-expected February producer price inflation report spooked traders on Thursday, with small caps bearing the brunt of the selling. The weakness of small-cap companies could be explained by the fact that they are very sensitive to interest rates, given that most of their financing would come in the form of bank loans.
The major averages opened higher, but reported gains soon after and spent the rest of the session below the unchanged line. On a positive note, key indices recovered some of their losses in the final stages of trading before closing at session lows.
The tech-Nasdaq Composite and the broader S&P 500 index closed lower for the second straight session, moving further away from all-time highs.
Nine of the 11 S&P 500 sectors closed lower, with only energy and communications services stocks bucking the trend. Real estate, financials and utilities stocks were among the worst decliners.
| Index | Performance (+/-) | Value |
| Nasdaq composite | -0.30% | 16,128.53 |
| S&P 500 Index | -0.29% | 5,150.48 |
| Dow Industrials | -0.35% | 38,905.66 |
| Russell 2000 | -1.96% | 2,031.18 |
Analyst Color:
Following Thursday’s “disastrous” PPI report, fund manager Louis Navellier he said the Fed was unlikely to cut interest rates until June or later. According to the fund manager, retail sales were disappointing, indicating lackluster GDP growth.
Despite the modest outlook, Navelier said the new market leadership remains intact. “AI hardware and weight loss drugs remain the strongest investment themes,” she said.
Futures today
Futures performance enabled Friday (at 6:45 a.m. EDT)
| Futures | Performance (+/-) |
| Nasdaq100 | +0.29% |
| S&P500 | +0.25% |
| Dow | +0.13% |
| R2K | +0.25% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust Fund TO SPY rose 0.21% to $514.44, and the Invesco QQQ ETF QQQ rose 0.25% to $440.23, according to Benzinga Pro data.
Upcoming economic data:
The New York Fed will release the results of its Empire State manufacturing survey for March at 8:30 a.m. EDT. On average, economists expect the business conditions index to come in at -7, suggesting a contraction in activity. However, the index is likely to improve from February’s reading of -2.4.
The Bureau of Labor Statistics will release its February import and export price report at 8:30 a.m. EDT. Import and export prices may have increased by 0.3% and 0.2% month-on-month, respectively, slower than increases of 0.8% each in the previous month.
The Fed will release its industrial production report for February at 9:15 a.m. ET. The consensus estimate is for industrial production to remain unchanged from the previous month, despite a 0.3% increase in manufacturing production. These metrics fell 0.1% and 0.5% respectively in January.
The University of Michigan’s preliminary consumer confidence index will be released at 10 a.m. ET and is expected to come in at 77.1 for March, up slightly from 76.9 in February. Traders can also focus on the survey’s inflation expectations readings.
See also: How to trade futures
Featured actions:
- Adobe Inc. ADBE fell more than 11.5% in pre-market trading following the company’s earnings announcement.
- Other stocks that reacted to earnings releases after the market closed on Thursday are Blink Charging Co. BLNK (down by approximately 8.50%), Smartsheet Inc. FAT (down about 12%), PagerDuty, Inc. PD (down more than 7.50%), Cardlytics, Inc. CDLX (growing by over 38.50%), Ulta Beauty, Inc. ULTA (down approximately 6.50%) e Zumiez Inc. ZUMZ (down more than 6%).
- Hibbett, Inc. MISTAKE, Jabil Inc. JBL AND Buckle, Inc. BKE are among the notable companies reporting ahead of market opening.
- Coinbase Global, Inc. CURRENCY fell more than 5% following the cryptocurrency sell-off.
- Rivian Automotive, Inc. RIVN rose about 4% after Piper Sandler upgraded the stock to Overweight.
Commodities, Bonds, Other Global Stock Markets:
Crude oil futures fell 0.63% to $80.75 in pre-market trading, reversing part of the 1.93% gain made on Thursday. Gold futures are higher, even as they continue to fall to record levels.
The 10-year Treasury yield, which spiked on Thursday following inflation data, fell 0.019 point to 4.279%. Bitcoin Bitcoin/USD it fell nearly 8% and traded below the $67,500 level.
Most Asian markets retreated on Friday, facing an overnight negative lead from Wall Street, although the Chinese market advanced moderately after weak home prices and money stock and loan growth data released by the country fueled hopes for further government stimulus.
European stocks were up modestly in late morning trading, with the Euro STOXX 50 index up about 0.40%.
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