U.S. stock index futures edged lower on Friday, capping off an otherwise positive week with some caution ahead of the latest business activity data release.
As of 06:10 ET Dow Jones Futures were down 75 points (0.2%), S&P 500 Futures fell 14 points (0.2%), and Nasdaq 100 Futures dropped 65 points (0.3%).
On Thursday, the major indices closed higher, buoyed by Nvidia’s strong performance following an earnings beat, solidifying its position as the world’s most valuable publicly traded company.
For the week, the Dow Jones Industrial Average is set to gain 1%, the S&P 500 is up 1.3%, and the NASDAQ Composite has climbed 1.6%.
Rate Cut Uncertainty in December
Despite the market’s upbeat tone, uncertainty lingers over whether the Federal Reserve will proceed with a December rate cut. Strong October inflation data and a cautious stance from policymakers on further easing have tempered expectations.
This week’s jobless claims data highlighted the resilience of the U.S. labor market, while Chicago Fed President Austan Goolsbee expressed openness to a more gradual approach to rate cuts.
Traders have scaled back some expectations for a 25-basis-point rate cut by the Federal Reserve in December, with CME Fed Watch now showing a 61.7% probability of such a move.
On Friday, attention shifts to the preliminary purchasing managers’ index reports for November, which are expected to provide insights into corporate sentiment following Donald Trump’s election victory.
Meanwhile, European data painted a gloomier picture earlier in the day. Eurozone business activity experienced an unexpectedly steep decline, with the dominant services sector contracting and manufacturing sliding further into recession.
Tech Sector and Gap in the Spotlight
The tech sector remains under scrutiny Friday after Alphabet Google’s parent company, tumbled nearly 5% on Thursday. The drop followed recommendations from the Department of Justice (DOJ) that Google divest its Chrome web browser to address concerns over its dominance in online search.
Additionally, the DOJ proposed that Google share its data and search results with competitors and potentially divest its Android operating system. These recommendations come in the wake of a landmark ruling earlier this year that determined Google had maintained an illegal monopoly in online search.
Meanwhile, Nvidia posted gains as robust demand for artificial intelligence drove an earnings beat. However, the company tempered expectations by forecasting slower revenue growth in the current quarter.
Nvidia Gains, Gap Soars, Intuit Drops
Nvidia saw gains as robust demand for artificial intelligence powered an earnings beat, though the company projected a slower pace of revenue growth for the upcoming quarter.
In contrast, Gap shares surged in premarket trading after the retailer raised its annual sales forecast and reported a “strong start” to the holiday shopping season.
However, Intuit faced a setback, with its stock dropping 5% premarket after the financial software company issued weaker-than-expected guidance for both the second quarter and the fiscal year.
Crude Oil Set for Weekly Gains
Oil prices edged higher on Friday, heading for strong weekly gains as concerns grew over potential supply disruptions stemming from the Russia-Ukraine conflict.
As of 06:10 ET, U.S. crude futures (WTI) rose 0.1% to $70.12 per barrel, while Brent crude climbed 0.7% to $71.28 per barrel.
Both crude benchmarks were on track for weekly gains of 4% to 5%, marking their best performance since late September. Traders have been pricing in a higher risk premium for oil following Kyiv’s deployment of Western-made long-range missiles.
