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Saturday, December 9, 2023

Dow futures edge higher; on course for sharp weekly losses

Dow futures edge higher; on course for sharp weekly losses
© Reuters.

 

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Investing.com — U.S. stock futures traded marginally higher Friday, but were on course to post hefty weekly losses in the wake of the Federal Reserve signaling it expected to keep interest rates higher for longer.

By 06:20 ET (10:20 GMT), the Dow Futures contract was up 25 points, or 0.1%, S&P 500 Futures traded 10 points, or 0.2%, higher and Nasdaq 100 Futures climbed 65 points, or 0.4%.

Wall Street set for losing week

The main indices on Wall Street closed sharply lower Thursday, as surging bond yields in the wake of the Fed meeting, with the benchmark 10-year Treasury yield climbing to its highest level since 2007, weighed heavily. 

This has pressured the highly-indebted tech sector, with the Nasdaq Composite on track to drop 3.5% this week, which would be its worst week since March. The blue-chip Dow Jones Industrial Average stands 1.6% lower so far this week, while the broad-based S&P 500 is on course to drop 2.7%.

The Fed held rates steady this week, but signaled it might raise them one more time this year and keep them elevated for longer than anticipated as it tries to slay inflation. 

The U.S. central bank Fed officials also signaled two rate cuts next year, half the number they anticipated in their last round of forecasts in June.

September PMI data due

The U.S. economic data slate will center around the purchasing managers index reports for September on Friday, with the S&P Global U.S. manufacturing index expected to show a reading of 48, still in contraction territory, while the services index is tipped to come in at a healthy 50.6.

The equivalent data released earlier in Europe indicated that the eurozone economy will likely contract in the third quarter, with the flash composite index coming in at 47.1 in September, a slight improvement from August’s 33-month low of 46.7.

Activision acquisition receives boost

In corporate news, the U.K. competition regulator signaled that Microsoft’s potential acquisition of Activision Blizzard (NASDAQ:ATVI) may now be approved.

This followed Microsoft (NASDAQ:MSFT) restructuring its proposal, proposing the divestment of cloud rights for existing Activision games, including the popular “Call of Duty”, to French game publisher Ubisoft Entertainment.

Investors will also be keeping an eye on negotiations to end the UAW strike impacting the major U.S. auto manufacturers, while a U.S. government shutdown draws nearer with the midnight Sept. 30 deadline on a funding deal just over a week away and no agreement between the two political parties in sight.

Crude helped by Russia export ban 

Oil prices rose Friday on growing expectations of tighter supplies, following the previous session’s news that Russia has banned exports of gasoline and diesel with immediate effect to stabilize the domestic fuel market.

This added to an already tight supply situation as the Organization of the Petroleum Exporting Countries and allies maintained previously announced production cuts.

By 06:20 ET, the U.S. crude futures traded 1.2% higher at $90.70 a barrel, while the Brent contract climbed 1% to $94.25. 

Additionally, gold futures rose 0.3% to $1,945.05/oz, while EUR/USD traded 0.2% lower at 1.0636.

(Oliver Gray contributed to this item.)

 

Source: Investing.com

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