After a decline in the prior session, stocks appear set to rebound in early trading on Friday. The futures for major indices indicate an upward opening, with S&P 500 futures rising by 0.4%.
The tech-centric Nasdaq is poised to gain from a significant surge in Broadcom (AVGO) shares, which are climbing 17.5% in pre-market trading. This spike follows Broadcom's report of stronger-than-expected fiscal fourth-quarter earnings and its outlook for sustained robust demand for its custom AI chips.
Investor sentiment may also improve due to positive expectations regarding interest rates ahead of next week’s Federal Reserve meeting. The Fed is broadly anticipated to reduce interest rates by another 25 basis points. Traders will likely scrutinize the accompanying statement for hints about potential future rate adjustments.
Persistent inflation has fueled concerns that the Fed will reduce rates more gradually next year than previously predicted. According to the CME Group's FedWatch Tool, there is currently a 96.4% probability that the Fed will lower rates by a quarter point next week. However, there is a 74.6% probability that the rates will remain unchanged in late January.
In terms of inflation, the Labor Department has released data showing a slight, unexpected increase in U.S. import prices for November. Import prices rose by 0.1% in November, aligning with the downwardly revised gain in October. Economists had projected a 0.2% decline in import prices, in contrast to the originally reported 0.3% increase for the previous month. Meanwhile, export prices held steady in November following a revised 1.0% increase in October.
On Thursday, stocks initially rallied but later reversed course, with the Dow closing lower for the sixth consecutive session. The major averages hit new session lows by the close. Specifically, the Dow fell 234.44 points or 0.5% to 43,914.12, the Nasdaq decreased 132.05 points or 0.7% to 19,902.84, and the S&P 500 dropped 32.94 points or 0.5% to 6,051.25.
In international markets, the Asia-Pacific region largely experienced downturns on Friday. Japan's Nikkei 225 Index fell by 1.0%, and China's Shanghai Composite Index plunged by 2.0%. Conversely, European markets experienced modest gains. The U.K.'s FTSE 100 Index is slightly above the unchanged line, while the German DAX Index has increased by 0.1%, and the French CAC 40 Index is up by 0.2%.
In commodity markets, crude oil futures are up $0.37 to $70.39 per barrel after a decline of $0.27 to $70.02 per barrel on Thursday. Meanwhile, gold futures, which plummeted $47.30 to $2,709.40 an ounce in the previous session, are now falling $25.90 to $2,683.50 an ounce.
On the currency exchange front, the U.S. dollar is trading at 153.30 yen, up from 152.63 yen at the previous close of New York trading. Against the euro, the dollar stands at $1.0516, compared to yesterday's $1.0468.
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