U.S. Stocks May Give Back Ground Following Recent Strength
Stocks may move to the downside in early trading on Friday, giving back ground after trending higher over the past several sessions. The major index futures are currently pointing to a modestly lower open for the markets, with the S&P 500 futures down by 0.2 percent.
Profit taking may contribute to initial weakness on Wall Street, as some traders look to cash in on the recent strength in the markets.
The major averages gave back ground after an early rally on Thursday but still ended the session at new record closing highs.
Lingering uncertainty about the outlook for interest rates may also weigh on the markets following the Federal Reserve’s monetary policy announcement earlier in the week.
While the Fed maintained its forecast for three interest rate cuts this year, the timing of the first rate cut remains undetermined.
The chances of a quarter point rate cut in June have rebounded to 65.9 percent, according to CME Group’s FedWatch Tool, but there is still a 27.8 percent chance the Fed will leave rates unchanged at the meeting.
Shortly before the start of trading, Fed Chair Jerome Powell is due to give opening remarks before a “Fed Listens” event to hear perspectives on current economic conditions and how the pandemic experience has reshaped the economy and the workforce.
Among individual stocks, shares of Lululemon (LULU) are moving sharply lower in pre-market trading after the athletic apparel retailer reported better than expected fiscal fourth quarter results but provided disappointing guidance.
Athletic footwear and apparel giant Nike (NKE) may also come under pressure after reporting fiscal third quarter earnings and revenues that exceeded estimates but slowing growth in China.
Meanwhile, shares of FedEx (FDX) are seeing significant pre-market strength after the delivery giant reported fiscal third quarter results that beat expectations and announced a new $5 billion share repurchase program.
Stocks showed a strong move to the upside in early trading on Thursday but gave back ground over the course of the session. While the major averages pulled back well off their best levels of the day, they still ended the session at new record closing highs.
The Dow finished the day firmly in positive territory, while the S&P 500 and the Nasdaq posted more modest gains. The Dow climbed 269.24 points or 0.7 percent to 39,781.37, the S&P 500 rose 16.91 points or 0.3 percent at 5,241.53 and the Nasdaq edged up 32.43 points or 0.2 percent to 16,401.84.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index crept up by 0.2 percent, while China’s Shanghai Composite Index slumped by 1.0 percent and Hong Kong’s Hang Seng Index plunged by 2.2 percent.
The major European markets have also turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 0.5 percent, the German DAX Index is nearly unchanged and the French CAC 40 Index is down by 0.4 percent.
In commodities trading, crude oil futures are inching up $0.14 to $81.21 a barrel after slipping $0.20 to $81.07 a barrel on Thursday. Meanwhile, after surging $23.70 to $2,184.70 an ounce in the previous session, gold futures are falling $9.30 to $2,175.40 an ounce.
On the currency front, the U.S. dollar is trading at 151.10 yen versus the 151.62 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0826 compared to yesterday’s $1.0860.
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