U.S. stock futures moved higher on Friday, pointing to an extension of gains on Wall Street registered in the prior session. Markets will get a chance to pour over U.S. consumer sentiment data today, while traders are also preparing for crucial inflation numbers next week. Shares in several Chinese electric vehicle firms fall in Hong Kong trading on reports that the U.S. is preparing to unveil further tariffs against Chinese companies.
1. Futures higher
U.S. stock futures climbed on Friday as investors looked ahead to a key inflation print next week and assessed a raft of corporate earnings.
By 03:23 ET (07:23 GMT), the S&P 500 futures contract had gained 11 points or 0.2%, Nasdaq 100 futures had edged up by 48 points or 0.3%, and Dow futures had risen by 79 points or 0.2%.
The 30-stock Dow Jones Industrial Average posted its seventh straight positive session on Thursday, boosted by a higher-than-anticipated reading of weekly U.S. jobless claims. The figure was the latest sign of potential cooling in the American labor market and bolstered bets that the Federal Reserve could begin to ratchet down interest rates from a more than two-decade high as soon as September.
The Dow ended the day at its highest mark since April 1, while the benchmark S&P 500 and tech-heavy Nasdaq Composite also advanced.
In individual stocks, chip designer Arm Holdings (NASDAQ:ARM) shed 2.3% on a weaker-than-expected annual revenue outlook and video-gaming platform Roblox (NYSE:RBLX) slumped by 22.1% after it slashed its full-year bookings guidance.
Markets are now turning their attention to next week’s U.S. producer and consumer price data, which could provide a fresh glimpse into the trajectory of inflation in the world’s largest economy.
2. Michigan consumer sentiment ahead
The preliminary reading of the University of Michigan’s consumer sentiment index for May is set to highlight an otherwise quiet day on the economic calendar on Friday.
Analysts predict that the survey will come in at 76.0, down from a final reading of 77.2 in April. Although this would indicate that consumer sentiment is waning, economists have noted that the index has not broken out of a 5-point change that they would deem to be statistically signficant since January.
In April, Joanne Hsu, Director of the Surveys of Consumers at the University of Michigan, said that most American shoppers are “reserving judgment about the economy” ahead of the all-important presidential election in November.
Meanwhile, the survey’s data on one-year expectations for inflation is also set to be released. The mark increased to 3.2% in April from 2.9% in March, slightly above a band of 2.3% to 3.0% registered in the two years prior to the COVID-19 pandemic.
3. Gold prices on pace for weekly gains
Gold prices rose in European trade on Friday, extending overnight gains, as more signs of a softening U.S. labor market weighed on the dollar and Treasury yields, benefiting prices of the yellow metal.
Bullion prices were now set to break a multi-week losing spree, as some safe haven demand also remained in play amid bets that Israel and Hamas will not reach a ceasefire deal. Reports of fresh U.S. trade tariffs on China also sparked some safe haven demand.
Spot gold rose 0.3% to $2,354.06 an ounce, while gold futures expiring in June jumped 0.9% to $2,360.75 an ounce by 00:53 ET (04:53 GMT).
Spot prices were set to add more than 2% this week, their first positive week in three. But they still remained well below record highs hit in late-April.
4. Chinese EV stocks sink on reports of U.S. tariffs
Shares of major Chinese electric vehicle makers fell on Friday, after multiple reports said that the U.S. was preparing more tariffs against Chinese companies, that were specifically aimed at EVs and other key sectors.
Li Auto (HK:2015), Nio (HK:9866), and BYD (HK:1211) fell between 1% and 4% in Hong Kong trade, lagging a 2.5% jump in the Hang Seng index.
Xiaomi (HK:1810), which recently entered the EV sector with its SU7 model, closed higher after slipping by 0.9%, while battery making giant Contemporary Amperex Technology (SZ:300750) dropped 2.8% as the reports said China’s battery industry will also be targeted.
Reports from Bloomberg and Reuters said U.S. President Joe Biden could announce new tariffs on China as soon as next week, extending certain levies that were imposed by former President Donald Trump.
But the new tariffs will be far more targeted than the Trump-era levies, and will focus on key strategic sectors such as EVs, batteries, and solar energy equipment.
5. Oil prices climb
Crude prices rose Friday, on track for a weekly gain, after this week’s data from the U.S. and China — the world’s two largest crude users — pointed to higher demand.
By 03:24 ET, the U.S. crude futures traded 0.6% higher at $79.72 per barrel, while the Brent contract climbed 0.5% to $84.33 a barrel.
Both contracts were on pace to gain about 2% each this week after suffering steep losses in the prior week.
Stronger-than-projected overall import data from China, the world’s biggest oil importer, coupled with a fall in U.S. crude inventories, has raised hopes that global oil demand was improving.