Last Updated: 4:15 PM EST
Stock indices finished today’s trading session in the red amid inflation fears. Indeed, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell 1.66%, 1.46%, and 1.24%, respectively. Hawkish fedspeak didn’t help either.
Kansas City Fed President Jeffrey Schmid emphasized on Friday that the current strict monetary policy should continue since inflation rates continue to hover above the 2% target, along with labor market tightness. He expressed a preference for maintaining the current policy rate of 5.25%-5.50%.
Furthermore, the University of Michigan released its preliminary results on consumer inflation expectations over the next five years. Consumers now expect inflation to be 3%, which was higher than the expected 2.8% and increased compared to the previous month.
Taking a look at consumer sentiment, results came in at 77.9, which was lower than the expected 79. This is also a decrease compared to last month’s reading of 79.4.
First Published: 2:50 AM EST
U.S. futures held steady on Friday morning as traders awaited Q1 earnings from some of the big Wall Street banks today. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were up by 0.07%, 0.04%, and 0.11%, respectively, at 2:41 a.m. EST, April 12.
Yesterday, the Dow Jones inched 0.01% lower. However, the S&P 500 and Nasdaq Composite gained 0.74% and 1.68%, respectively, due to a rebound in tech stocks. Importantly, all the Magnificent Seven stocks ended the day in green, adding a combined $300 billion to their market cap. Notably, Apple (AAPL) and Nvidia (NVDA) led the charge with gains exceeding 4%, while Amazon (AMZN) reached a new record high of $189.77.
Interestingly, Jamie Cox, managing partner at Harris Financial Group, said that yesterday’s rally in tech stocks may have been driven by investors looking for buying opportunities after recent dips. Furthermore, he believes that rising stock prices are not dependent on interest rate cuts but on strong earnings reports.
Echoing a similar view, Sanders Morris Chairman George Ball believes strong corporate earnings, despite rising interest rates, will be the key driver for market growth.
Notably, financial giants including JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), BlackRock (BLK), and State Street (STT) will kick off the Q1 earnings season today by releasing their quarterly numbers before the market opens.
On the economic front, the Michigan Consumer Sentiment Index for April and the 5-year Consumer Inflation Expectations are scheduled for release today. These reports provide insights into consumer confidence and inflation perceptions in the U.S.
Meanwhile, the U.S. 10-year treasury yield was down at the time of writing, floating near 4.56%. At the same time, WTI crude oil futures trended higher, hovering near $85.87 per barrel as of the last check, as rising geopolitical tensions in the Middle East raised supply concerns.
Elsewhere, European indices are expected to open higher today as investors are optimistic about future rate cuts despite lingering uncertainty about the U.S. Federal Reserve’s plans.
Asia-Pacific Markets Trade Mixed on Friday
Asia-Pacific indices displayed a mixed trading session today as investors looked forward to China’s trade data due today.
Hong Kong’s Hang Seng index was down 1.92% at the time of writing. Similarly, China’s Shanghai Composite and Shenzhen Component indices were trading lower by 0.31% and 0.56%, respectively. On the other hand, Japan’s Nikkei and Topix indices closed higher by 0.21% and 0.46%, respectively.
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