U.S. stock futures climbed early Friday as investors embraced signs of progress on trade with China and bets that the Federal Reserve may begin cutting interest rates as soon as July. Markets are shaking off spring volatility and inching toward record territory.
Major indexes edge higher in premarket
As of this AM:
- Dow futures: 43,846.00 (+0.29%)
- S&P 500 futures: 6,211.75 (+0.27%)
- Nasdaq futures: 22,748.50 (+0.35%)
The S&P 500 is just 0.1% away from its all-time intraday high of 6,147.76, with markets surging 23.3% since April 8. The benchmark’s recovery highlights renewed optimism among investors after a tense spring dominated by trade headlines and geopolitical tensions.
Trade truce boosts global sentiment
President Trump announced that a trade deal had been signed with China. Commerce Secretary Howard Lutnick confirmed that the U.S. is finalizing agreements with 10 additional countries. Beijing also committed to easing restrictions on rare earth exports and reducing tech transfer barriers.
European equities mirrored the U.S. optimism:
- Stoxx 600: 542.24 (+0.89%)
- Nikkei 225: 40,150.79 (+1.43%)
- Shanghai Composite: 3,424.23 (-0.70%), pressured by weak industrial profits data (-9.1% YTD)
Tech leads rally, but eyes on inflation
Tech giants helped fuel Thursday’s gains, with chipmakers and AI-related firms rebounding. Nvidia’s valuation neared $3.8 trillion, and the Nasdaq continues to benefit from bullish sentiment around innovation.
Investors now turn their focus to Friday’s May Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge. The report is due at 8:30 a.m. ET.
Expected figures:
- PCE price index: +0.1% MoM, +2.3% YoY
- Core PCE (excludes food & energy): +0.1% MoM, +2.6% YoY
A soft inflation reading could strengthen the case for a Fed rate cut as early as July.
Key market metrics
- U.S. 10-year yield: 4.269%, ticking higher on upbeat sentiment
- VIX (Volatility Index): 16.19 (-2.41%), reflecting reduced investor fear
- Gold: $3,297.30 (-1.51%), as risk appetite rises
- Bitcoin: $107,051.53 (-0.49%), consolidating after recent highs
- Crude Oil: $65.44 (+0.31%), supported by summer demand expectations
- Dollar Index: 94.36 (-0.01%), hovering near 2023 lows
Market outlook
With major hurdles—tariffs, tax threats, and inflation spikes—showing signs of easing, Wall Street is recalibrating its expectations. Analysts say a combination of softer inflation and improved trade conditions could spark further gains.
“The stock market is back at record highs as various uncertainties start to fade,” said Paul Stanley, chief investment officer at Granite Bay Wealth Management. “Investors are once again betting on progress, not paralysis.”
Fed futures markets now price in a 64% chance of a rate cut in July, and 90% by September, based on CME FedWatch data. If confirmed, such action would mark the first monetary easing since early 2024.