(Reuters) – Futures tied to the S&P 500 and Nasdaq rose on Friday as investors looked forward to producer inflation reports for further clues on when to cut interest rates, while higher earnings forecasts led to higher yields・Materials’ stock price soared.
Wall Street’s main indexes recovered after falling earlier in the week on better-than-expected consumer price data. The weakness in U.S. retail sales in January has revived optimism that the Federal Reserve will cut interest rates in the first half of the year.
Traders are leaning toward the start of the Fed’s easing cycle in June, with 34.8% betting on a rate cut as early as May, according to CME Group’s FedWatch tool.
January producer price data, due at 8:30 a.m. ET (1330 GMT), will further shape the outlook for the Fed’s monetary policy direction. The measure expects prices to inch up by 0.1% after last month’s unexpected decline.
“The inflation shock from the U.S. earlier this week has been ignored for now, even as expectations for when the Fed will start cutting interest rates have waned,” Russ Mould, investment director at AJ Bell, said in a note. “It seems like it’s happening,” he said.
“So-called factory gate prices are important because when manufacturers and other producers charge more for goods and services, higher costs are typically passed on to consumers,” Producer Price Report Mordo added, referring to the book.
In the day’s big moves, Applied Materials Inc. announced ahead of the market after the semiconductor equipment supplier said it expected second-quarter earnings to beat expectations on strong demand for advanced chips used in artificial intelligence. The stock rose 13.0% in trading.
Nvidia rose 1.7% and most mega-cap stocks also rose after Mr. Oppenheimer raised his price target on the AI chip designer’s shares to $850 from $200.
Strong corporate earnings and growing enthusiasm for the potential of artificial intelligence have fueled Wall Street’s stock rally this year, pushing the benchmark S&P 500 index past the 5,000-point mark.
A total of 80.3% of S&P 500 companies that have reported quarterly results have exceeded expectations, compared with the annual average of 76%, according to LSEG data on Thursday.
Later in the day, investors will also focus on the University of Michigan’s February U.S. Consumer Sentiment Survey.
As of 5:30 a.m. ET, the Dow e-mini was down 36 points, or 0.09%, the S&P 500 e-mini was up 11 points, or 0.22%, and the Nasdaq 100 e-mini was up 107.75 points, or 0.6%. )Rose.
Cryptocurrency exchange Coinbase Global’s stock price rose 11.2% as it posted its first quarterly profit since 2021, supported by strong trading volumes due to renewed interest in cryptocurrencies.
DoorDash fell 7.6% as the company expected quarterly profit metrics to fall below Wall Street expectations due to higher labor costs.
(Reporting by Amruta Khandekar; Editing by Maju Samuel)
