Wall Street Poised To Open Higher After S&P 500's 4-Day Run: 'Sounds Like Powell Is Expecting More Frequent Bouts Of Stagflation,' Cautions Expert
U.S. stock futures advanced on Friday after a mixed close on Thursday. Futures of major benchmark indices were trading higher in premarket.
The S&P 500 index recorded its fourth day of gains on Thursday after turning positive for the year at the beginning of the week.
Jerome Powell, Federal Reserve Chair, indicated Thursday that the Fed is reassessing its inflation and employment strategies, suggesting potential shifts in policy following a comprehensive review scheduled for 2025.
"Participants have indicated that they thought it would be appropriate to reconsider the language around [labor market] shortfalls," Powell said, referring to how the Fed talks about employment in its official strategy.
Nasdaq dropped after continued positive momentum from partnerships with the Middle East during the U.S.-Saudi Investment Forum.
Meanwhile, the 10-year Treasury bond yielded 4.40% and the two-year bond was at 4.93%. The CME Group's FedWatch tool‘s projections show markets pricing a 91.8% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.
| Futures | Change (+/-) |
| Dow Jones | 0.33% |
| S&P 500 | 0.23% |
| Nasdaq 100 | 0.23% |
| Russell 2000 | 0.40% |
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Friday. The SPY was up 0.14% to $591.31, while the QQQ advanced 0.16% to $520.06, according to Benzinga Pro data.
Cues From Last Session:
Led by strong gains in utilities, consumer staples, and real estate, most sectors within the S&P 500 finished Thursday in positive territory, contributing to the index’s fourth consecutive session of gains.
However, consumer discretionary and communication services stocks diverged from the broader market, ending the day lower.
Overall, the S&P 500 has climbed approximately 4.5% week-to-date, followed by a roughly 2.6% increase for the Dow and a significant 6.6% rise for the Nasdaq.
Notably, tech giants like Nvidia Corp. (NASDAQ:NVDA) and Tesla Inc. (NASDAQ:TSLA) have seen substantial weekly gains of around 15% each, with Amazon.com Inc. (NASDAQ:AMZN) and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) also adding around 6% and 7%, respectively.
In other news, Walmart Inc. (NYSE:WMT) reported stronger-than-anticipated first-quarter earnings, while Foot Locker Inc. (NYSE:FL) shares surged around 86% following an agreement for acquisition by DICK’s Sporting Goods Inc. (NYSE:DKS).
On the economic front, initial jobless claims remained steady, U.S. retail sales saw a modest 0.1% monthly increase in April, and U.S. producer prices unexpectedly declined by 0.5% in April.
The Dow Jones index advanced 272 points or 0.65% to 42,322.75, whereas the S&P 500 index rose 0.41% to 5,916.93. Nasdaq Composite ended 0.18% lower at 19,112.32, and the small-cap gauge, Russell 2000, ended 0.52% higher at 2,094.69.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.18% | 19,112.32 |
| S&P 500 | 0.41% | 5,916.93 |
| Dow Jones | 0.65% | 42,322.75 |
| Russell 2000 | 0.52% | 2,094.69 |
Insights From Analysts:
Ed Yardeni of Yardeni Research said in his QuickTakes note that Fed Chair Powell “poked a stick” at the White House following his speech on Thursday.
Yardeni pointed out that Powell implied that the bond yields might stay elevated as a result of more frequent “supply shocks,” like tariffs.
“Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s,” Powell said in prepared remarks for the Thomas Laubach Research Conference in Washington, D.C.
Yardeni said, “Sounds like Powell is expecting more frequent bouts of stagflation, which was associated with supply shocks in the past.”
“The stock and bond markets didn’t react much to the speech partly because today’s batch of indicators were mostly ambiguous about the near-term prospects for stagflation,” he added.
As the PPI declined in April, Louis Navellier of Navellier & Associates said, “The PPI demonstrated that despite recent trade chaos, wholesale prices are falling from lackluster economic activity and surplus goods that have been ‘dumped’ in the U.S.”
Meanwhile, commenting on the declining PPI, Jamie Cox, the managing partner at Harris Financial Group, added, “If you are in the stagflation camp, these data aren't confirming your thesis. While growth is slowing, disinflation remains intact.”
Speaking about the S&P 500 earnings so far, Navellier said, “Now that 90% of the companies in the S&P 500 have announced their first quarter results, earnings are running at an 11.2% annual pace, which represents the seventh straight quarter of improving earnings growth.”
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Upcoming Economic Data
Here’s what investors will keep an eye on Friday:
- April’s import price index, housing starts, and building permit data will be released by 8:30 a.m. ET.
- The preliminary consumer sentiment for May will be released by 10:00 a.m. ET.
Stocks In Focus:
- Flowers Foods Inc. (NYSE:FLO) fell 2.17% in premarket on Friday as analysts expect it to report quarterly earnings of 38 cents per share on revenue of $1.60 billion, before the opening bell.
- Brady Corp. (NYSE:BRC) rose 1.77% as Wall Street expects it to report earnings before the opening bell. It is expected to post earnings of $1.22 per share on revenue of $386.81 million.
- RBC Bearings Inc. (NYSE:RBC) declined 0.56% as analysts expect it to report quarterly earnings of $2.70 per share on revenue of $440.26 million, before the opening bell.
- Take-Two Interactive Software, Inc. (NASDAQ:TTWO) fell 3.59% after the company guided for its first quarter net bookings to be in a range of $1.25 billion to $1.30 billion and full fiscal-year net bookings to be in a range of $5.90 billion to $6.00 billion.
- Applied Materials Inc. (NASDAQ:AMAT) dropped 6.19% after a mixed second quarter. The earnings per share were better than expected, while sales missed estimates.
- WeRide Inc. (NASDAQ:WRD) was up 2.85% after launching a fully driverless robotaxi trial operation in Abu Dhabi.
- Vistra Corp. (NYSE:VST) jumped 5.41% after acquiring natural gas assets worth $1.9 billion.
- Meta Platforms Inc. (NASDAQ:META) was 0.07% below flatline after the report of a delayed rollout for its AI model update.
- Incannex Healthcare Inc. (NASDAQ:IXHL) zoomed 68.98% after it finished administering doses to patients in the Phase 2 segment of its trial for Obstructive Sleep Apnea (OSA).
- Origin Materials Inc. (NASDAQ:ORGN) slumped 30.80% after the company reported a year-over-year decrease in first-quarter financial results and cut its FY26 sales guidance below estimates.
Commodities, Gold, And Global Equity Markets:
Crude oil futures were trading lower in the early New York session by 0.19% to hover around $61.50 per barrel.
Gold Spot US Dollar fell 0.96% to hover around $3,208.84 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was lower by 0.19% at the 100.6880 level.
Asian markets ended lower on Friday except South Korea's Kospi and Australia's ASX 200 index. Japan's Nikkei 225, Hong Kong's Hang Seng, India's S&P BSE Sensex, and China’s CSI 300 indices declined. European markets were higher in early trade.
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