1. Futures Point Higher
U.S. stock futures surged on Friday as investors anticipated upcoming inflation data and analyzed corporate earnings trends.
As of 03:23 ET (07:23 GMT), the S&P 500 futures rose by 11 points or 0.2%, Nasdaq 100 futures climbed by 48 points or 0.3%, and Dow futures advanced by 79 points or 0.2%.
On Thursday, the Dow Jones Industrial Average marked its seventh consecutive session of gains, driven by better-than-expected weekly U.S. jobless claims data. This indication of potential stabilization in the American labor market has strengthened expectations that the Federal Reserve might consider scaling back interest rates from their current two-decade high, possibly as early as September.
The Dow closed at its highest level since April 1, with both the S&P 500 and Nasdaq Composite also recording gains.
Among individual stocks, chip designer Arm Holdings (NASDAQ:ARM) saw a decline of 2.3% following a weaker-than-anticipated annual revenue outlook, while video-gaming platform Roblox (NYSE:RBLX) plummeted by 22.1% after reducing its full-year bookings guidance.
Investors are now focusing on next week’s release of U.S. producer and consumer price data, which could provide valuable insights into the trajectory of inflation in the world’s largest economy.
2. Michigan Consumer Sentiment Data in Focus
Friday’s economic calendar is relatively quiet, with the preliminary reading of the University of Michigan’s consumer sentiment index for May being a key highlight.
Analysts forecast the index to come in at 76.0, down from April’s final reading of 77.2. While this suggests a decline in consumer sentiment, economists note that the index has not experienced a statistically significant change exceeding 5 points since January.
In April, Joanne Hsu, Director of the Surveys of Consumers at the University of Michigan, observed that most American consumers are “reserving judgment about the economy” ahead of the crucial presidential election in November.
Additionally, the survey’s data on one-year inflation expectations is anticipated to be released, with April’s figure increasing to 3.2% from 2.9% in March, slightly above the range of 2.3% to 3.0% recorded in the two years preceding the COVID-19 pandemic.
3. Gold Prices Rebound for the Week
Gold prices rallied in European trading on Friday, extending gains from the previous session, buoyed by indications of a softening U.S. labor market that pressured the dollar and Treasury yields, consequently supporting gold prices.
With the possibility of Israel and Hamas failing to reach a ceasefire deal and reports of additional U.S. tariffs on China, safe-haven demand for gold remained intact.
Spot gold climbed 0.3% to $2,354.06 an ounce, while gold futures expiring in June surged 0.9% to $2,360.75 an ounce by 00:53 ET (04:53 GMT).
This week, spot prices are set to record a gain of over 2%, marking their first positive week in three, although they still remain below the record highs reached in late-April.
4. Chinese EV Stocks Decline on Tariff Reports
Shares of major Chinese electric vehicle manufacturers fell on Friday following reports of impending U.S. tariffs targeting Chinese companies, particularly in the EV and other critical sectors.
Li Auto (HK:2015), Nio (HK:9866), and BYD (HK:1211) declined between 1% and 4% in Hong Kong trading, underperforming the 2.5% gain in the Hang Seng index.
Xiaomi (HK:1810), which recently ventured into the EV sector with its SU7 model, closed higher after initially slipping by 0.9%, while battery giant Contemporary Amperex Technology (SZ:300750) dropped 2.8% as reports indicated that China’s battery industry could also face tariffs.
Bloomberg and Reuters reported that U.S. President Joe Biden may announce new tariffs on China as early as next week, extending certain levies imposed during the Trump administration. However, these new tariffs are expected to be more targeted, focusing on strategic sectors such as EVs, batteries, and solar energy equipment.
5. Oil Prices Gain on Demand Optimism
Crude oil prices climbed on Friday, poised for weekly gains, following positive data from the U.S. and China, the world’s top two crude consumers, indicating increased demand.
At 03:24 ET, U.S. crude futures were up 0.6% at $79.72 per barrel, while the Brent contract rose 0.5% to $84.33 a barrel.
Both contracts are on track to gain about 2% each this week after experiencing significant losses in the previous week.
Encouraging overall import data from China, coupled with a decline in U.S. crude inventories, has raised hopes for a recovery in global oil demand.
