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U.S. stock futures rose on Friday, setting up the Dow for its eighth consecutive session gain, as lower Treasury yields tied to bets on a Federal Reserve interest rate cut in the fall continue to support a bullish global market.
stocks ended higher on Thursday, with the S&P 500 now less than 1% from its March all-time high, after Labor Department data showed weekly jobless claims jumped to the highest levels since last summer. .
The surprising tally, when combined with last week's weaker-than-expected April jobs report, suggests cracks in the labor market that could ease inflationary pressures and validate the case for the Federal Reserve to cut rates in September.
A trio of large Treasury auctions this week, including benchmark sales of 10-year notes and 30-year bonds, also drew strong demand from foreign investors. The successful sales eased concerns about the government's growing deficit.
Benchmark 10-year bond yields fell to 4.453% in the overnight session, while 2-year bonds settled at 4.817% following the subdued reading on jobless claims.
Meanwhile, CME Group's FedWatch tool has raised the odds of a Fed rate cut in September to around 68.5%, although San Francisco Fed President Mary Daly warned last night that there is still ” considerable uncertainty” in the context of general inflation.
“In a scenario where inflation doesn't progress much further, then it's not appropriate to start adjusting the rate unless we see the labor market falter, which it shows no signs of doing,” Daly said at an event at the University George Mason in Fairfax, Virginia.
Related: S&P 500 Aims for Biggest Gain in History of Fed Interest Rate Pause
With most of the first quarter earnings season behind us, investors will now likely shift their attention to next week's initial inflation readings for April, which will include the key CPI reading on May 15.
Heading into trading on Wall Street on Friday, stocks are set for a strong string of opening gains, and the Dow Jones is looking to extend its winning streak to eight sessions.
Futures contracts tied to the S&P 500, which is now up 3.54% for the month, suggest an initial gain of 22 points, while the Dow is trading 145 points higher.
The tech-focused Nasdaq, which is up 4.4% for the month, is likely to get another bullish boost thanks to falling Treasury yields and is estimated to be up 95 points.
More Wall Street analysts:
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- Analysts Renew Disney Stock Price Target After Proxy Fight
In overseas markets, Britain's FTSE 100 hit a record high again in early London trading. The benchmark index was last up 0.83% on the session, following yesterday's dovish decision on Bank of England rates and data showing the best first-quarter GDP growth rate in almost three years .
Meanwhile, the MSCI regional index excluding Japan rose 0.87% in early trading in Frankfurt.
Overnight in Asia, Japan's Nikkei 225 finished up 0.41% at 38,229.11 points in a rally after last night's close on Wall Street, setting the index unchanged for the week after two weekly advances previous.
The MSCI regional index excluding Japan rose 0.97% at the close of the day.
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