Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 7, 2022.
Brendan Mcdermid | Reuters
Stock futures jumped Friday, indicating the S&P 500 was set to trade above a record closing high reached two years ago, as traders looked to build on the previous session’s tech-led rally.
Futures linked to the S&P 500 gained 0.6%, while Dow Jones Industrial Average futures climbed 225 points, or 0.6%. Nasdaq 100 futures rose 0.8%.
The S&P 500 was set to open above 4,796.56, the all-time high set in January 2022.
If the gain in morning futures holds, the benchmark could post a new record close on Friday. The S&P 500 was set to open above 4,796.56, the all-time high set in January 2022. It was also within striking distance of 4,818.62, its intraday record.
Stocks moved sharply higher Thursday, with the S&P 500 and Nasdaq erasing their 2024 losses. Thursday’s gains were powered by major advances in the technology sector, after Bank of America upgraded shares of Apple to a buy rating. Apple posted its biggest one-day gain since May 5, 2023. That move came even as the benchmark 10-year Treasury yield climbed. The year on the 10-year Treasury was last little changed at 4.136%.
Investors’ optimism for interest rate cuts and a soft landing in 2024 have fueled a market rally since October 2023. The rate backdrop will remain a key focus for stocks this year, Scott Chronert, Citi U.S. Equity Strategist, told CNBC’s “Squawk Box” on Friday.
“While we do get focused on interest rates in the bigger macro picture, the fundamental growth story for these companies look like it’s beginning a little bit of a tailwind recently,” Chronert said. “That’s that’s keeping that part of the market up and running.”
To be sure, Chronert cautioned investors to “be careful what they wish for” as in the inflation-falling scenario.
“You typically see more volatility in the markets when the Fed is in an easing mode, than when it’s in a hiking mode. So we have to be prepared for a lot of the more ‘idiosyncratic behavior,'” said Chronert. While mega-cap tech companies have continue to fuel much of the market’s gains in 2024, Chronert expects market participation to broaden as the Fed pivots to rate cuts.
Wall Street also kept its eyes on Washington after Congress passed a bill to avert a partial government shutdown. This stopgap measure keeps the federal government funded through March 1 and March 8. The Senate voted 77-18 to pass the bill, while the House voted to move it forward, 314-108. The bill goes to President Joe Biden for signing.
Insurance company Travelers jumped more than 5% in the premarket after posting an earnings beat. Schlumberger N.V. added 1.3% after reporting better-than-expected revenue in the fourth quarter.
Shares of iRobot plunged about 40% after The Wall Street Journal reported that the European Commission would likely reject Amazon’s bid to acquire the Roomba manufacturer. The Journal cited people familiar with the matter.
Correction: An earlier version incorrectly stated that European regulators said they would likely reject Amazon’s bid to acquire iRobot.
