US Stocks Likely To Open Higher, Investors Eye Fed Policy Meet Next Week: Broadcom, RH, Costco In Focus
U.S. stock futures advanced on Friday in premarket hours after declining in trade on Thursday. The futures of all four major indices were trading higher.
The 10-year and two-year Treasury notes yielded 4.33% and 4.19%, respectively. Traders await the import price index data, which will be released later today.
Wall Street is waiting for the Federal Reserve’s policy meeting next week. Federal Reserve officials are currently in a quiet period ahead of their December meeting.
November inflation data was in line with analyst expectations, shooting up the probability of a further 25 basis point rate cut in December rose to 96.7% versus 86% probability a week ago, according to CME Group’s FedWatch tool.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.65% |
| S&P 500 | 0.33% |
| Dow Jones | 0.23% |
| Russell 2000 | 0.29% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was up 0.41% to $606.79 and the Invesco QQQ Trust ETF (NASDAQ:QQQ) jumped 0.76% to $530.49, according to Benzinga Pro data.
Cues From The Last Session
U.S. stocks closed lower on Thursday, with the Dow Jones shedding over 200 points. The market reacted to fresh inflation data and weaker-than-expected guidance from tech giants.
Technology stocks were among the day’s biggest losers. Nvidia Corp (NASDAQ:NVDA) shares dipped over 1%, while Adobe Inc (NASDAQ:ADBE) plummeted more than 13% after issuing a disappointing 2025 outlook.
On the economic front, initial jobless claims rose to 242,000, higher than the estimated 220,000. Core producer prices increased by 0.2% month-over-month, aligning with market expectations.
Most S&P 500 sectors ended the day in the red, with healthcare, consumer discretionary, and communication services bearing the brunt of the decline.
However, consumer staples bucked the trend and closed higher.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.66% | 19.902.84 |
| S&P 500 | -0.54% | 6,051.25 |
| Dow Jones | -0.53% | 43,914.12 |
| Russell 2000 | -1.38% | 2,361.08 |
Insights From Analysts
Picking up from Thursday’s session, Jason Goepfert, the founder of SentimenTrader, said, “This will be the S&P 500’s 9th consecutive session with negative breadth. That’s happened fewer than 20 times in ~70 years. On average, the S&P has been -12% from its high during these streaks.”
Talking about the future of AI, BlackRock in their 2025 outlook said, “We think the AI mega force will benefit U.S. stocks more and that's why we stay overweight, particularly relative to international peers such as European stocks.”
The note added that the “key signposts” for them to change their views will include any “surge in long-term bond yields or an escalation in trade protectionism.”
The note also added that BlackRock has conviction in U.S. equities outperforming their international peers. “We recognize valuations are rich in U.S. equities but don't see them as a near-term market driver,” it added.
According to Charles Schwab’s 2025 outlook, the volatility backdrop is likely to be different from what investors got used to in 2024. “The likelihood of a similar dynamic in 2025 is low, in our opinion,” the note said.
“Starting with where we are now, though, the market is in a relatively healthy position. As shown in the chart below, the S&P 500 is comfortably above its 50 and 200-day moving averages; and when its 50 DMA was above its 200 DMA historically, the average annualized gain for the index (going back to the late 1920s) was 9.2%. There is strong momentum heading into the new year.”
However, “If inflation volatility picks back up, which will become clearer after tariff and labor policy implementations, there could be more risks to stocks via bonds,” Schwab note adds.
See Also: How To Trade Futures
Upcoming Economic Data
- On Friday, the import price index data will be released at 8:30 a.m. ET.
Stocks In Focus:
- Broadcom Inc (NASDAQ:AVGO) was 14.38% up in premarket after it saw a four-fold increase in AI connectivity revenue driven by Tomahawk and Jericho shipments. The management also highlighted a significant reduction in VMware spending in the fourth quarter.
- RH (NYSE:RH) was up 17.23% after it raised revenue guidance across the board based on current trends.
- Costco Wholesale Corporation (NASDAQ:COST) was up 0.3% in premarket after it reported its first-quarter revenue and earnings per share, which beat analyst estimates.
- Inovio Pharmaceuticals Inc (NASDAQ:INO) was down 22.61% after it announced a proposed public offering.
- Loop Industries Inc (NASDAQ:LOOP) gained 51.22% as completed convertible preferred financing with Reed Societe Generale Group.
- Repare Therapeutics Inc (NASDAQ:RPTX) tumbled 38.29% after it reported results of the Lunresertib and Camonsertib combination from MYTHIC Phase 1 gynecologic expansion clinical trial.
- Candel Therapeutics Inc (NASDAQ:CAD) fell 31.12% after the company announced the pricing of its public offering.
- Amentum Holdings Inc (NYSE:AMTM) was up 0.6% ahead of its earnings which are slated to be released before the opening bell. Analysts expect the company to report quarterly earnings at 25 cents per share.
- Investors are awaiting earnings results from 51Talk Online Education Group (NYSE:COE) today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures rose in the early New York session by 1.19% to hover around $70.86 per barrel.
The gold spot index fell by 0.88% to $2,685.59 per ounce. The Dollar Index was up 0.01% to 106.964 level.
Most Asian markets declined on Friday including Australia’s ASX 200, Hong Kong’s Hang Seng, China’s CSI 300, and Japan’s Nikkei 225. India’s S&P BSE Sensex and South Korea’s Kospi Index, bucked the trend as they advanced. Most European markets advanced.
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Photo courtesy: Wikimedia