US futures mixed after stocks hit record highs on fading inflation fears and the Fed's pledge to maintain support

Reuters

  • US futures were mixed on Friday morning, with investors set for a quiet end to a calm week.
  • Inflation fears have receded and the Fed has pledged to keep up support, helping tech stocks.
  • Fed Chair Jerome Powell said Thursday that he wants to “get back to a great economy.”
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

US stock futures were mixed on Friday morning after equities rose to record highs on Thursday following more dovish comments from Federal Reserve Chairman Jerome Powell and a fall in bond yields.

S&P 500 futures were up 0.05%, Dow Jones futures rose 0.11%, while Nasdaq 100 futures slipped 0.09%.

Stocks in Asia broadly fell overnight after the US blacklisted seven Chinese supercomputing entities and data showed a sharp 4.4% rise in Chinese producer price inflation. China’s CSI 300 ended 1.5% lower.

In Europe, the continent-wide Stoxx 600 inched 0.04% higher while the UK’s FTSE 100 fell 0.22%.

It has been a quieter week on the global stock markets, with a lack of major developments leading to calmer trading, although shares have moved firmly higher.

The S&P 500 had risen around 1.9% across the week as of Thursday’s close, taking it to new highs.

Increasing optimism about the US’s economic recovery, thanks to its ongoing vaccination rollout and huge stimulus packages, has helped stocks.

The Federal Reserve has also played its part, with minutes from its last meeting showing that policymakers do not plan to cut back on support for the economy any time soon.

Fed Chair Jerome Powell on Thursday reiterated that message at a virtual International Monetary Fund panel, and played down the risks of inflation.

“We just need to keep reminding ourselves that even though some parts of the economy are just doing great, there’s a very large group of people who are not,” he said. “I really want to finish the job and get back to a great economy.”

Powell’s comments, along with higher-than-expected weekly jobless-claims figures, caused the key 10-year US Treasury yield to slip further from recent highs. Yields, which move inversely to prices, have risen in recent months as investors react to stronger inflation expectations and higher chances that the Fed could start tapering its bond purchases.

The 10-year yield rose 3.2 basis points on Friday morning to 1.664% but was nonetheless well off March’s high of close to 1.8%.

Jeffrey Halley, senior market analyst at Oanda, said: “Powell stayed solidly on message overnight, emphasising once again the Fed’s priority in assisting the US employment recovery while dismissing inflation concerns as transitory.”

Richard Hunter, head of markets at Interactive Investor, said: “Steadying inflation concerns have opened the door for renewed buying interest in growth stocks.”

The Nasdaq 100 rose 1.04% on Thursday as tech stocks started to look more attractive as bond yields fell, while big tech names such as Apple and Netflix helped push the S&P 500 up 0.42%.

The dollar index rose 0.25% on Friday morning to 92.28, rebounding slightly along with bond yields after a fall on Thursday.

Oil prices slipped, with Brent crude down 0.84% to $62.67 a barrel and WTI crude 0.59% lower to $59.24 a barrel.

Source: Read Full Article