Futures dip on caution before business activity data; geopolitical tensions in focus
The benchmark S&P 500 and blue-chip Dow closed Thursday at one-week highs, with AI bellwether Nvidia managing modest gains after its quarterly forecast, while investors took comfort from robust economic data. In premarket trading on Friday, Nvidia dropped 0.4%.
Market attention is now on a S&P business activity survey due at 9:45 a.m. ET, with forecasts pointing to services activity still in expansion territory, while manufacturing is expected to remain in contraction.
At 07:02 a.m., Dow E-minis were down 29 points, or 0.06%, S&P 500 E-minis slipped 8.25 points, or 0.14% and Nasdaq 100 E-minis fell 49.25 points, or 0.24%.
The three main indexes are on track to end the week higher, with sentiment still strong about the positive implications Donald Trump's tax and tariff policies could have for corporates after his win in the presidential election.
Futures tracking small caps inched up 0.2% and the Russell 2000 index was set for weekly advances of about 2%.
However, expectations on the Federal Reserve's policy move in December have recently swayed between a pause and a cut, as investors weigh the impact Trump's policies can have on price pressures.
There is a 59.4% probability the central bank will lower borrowing costs by 25 basis points, as per the CME Group's FedWatch Tool.
"The strong economic growth is good for business, but strong business is not necessarily good for taming inflation. Add Trump's plans to cut taxes and impose tariffs...and the inflation outlook doesn't look supportive of sustained rate cuts from the Fed," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Comments from Federal Reserve Board Governor Michelle Bowman will also be parsed later in the day.
Markets were also monitoring a missile exchange between Ukraine and Russia after the latter lowered its threshold for a nuclear retaliation earlier in the week. Energy stocks are the most sensitive to geopolitical risks and have gained over 2% this week.
Among top movers, Gap Inc jumped 15.2% after the Old Navy parent raised its annual sales forecast and said the holiday season was off to a "strong start".
Intuit lost 5% after the TurboTax parent projected second-quarter revenue and profit below Wall Street estimates on Thursday.
Alphabet dipped 0.7% and Amazon.com was flat.
On Thursday, the Google parent slid after prosecutors argued it was monopolizing online search, while a report said Europe will start an investigation next year into whether Amazon favors its own brand products on its online marketplace.
Most crypto stocks edged higher, with bitcoin trading shy of $100,000. MicroStrategy added 4.7%, while Coinbase was up 1.3%.
Speculations were rife about who could be the Treasury Secretary in the Trump cabinet, with a report saying the president-elect floated the idea of appointing Kevin Warsh on the understanding he could later be Federal Reserve Chairman.
(Reporting by Johann M Cherian and Purvi Agarwal in Bengaluru; Editing by Krishna Chandra Eluri)
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