Dow Futures Climb As Markets Eye Fed’s Favorite Inflation Metric — Strategist Says S&P 500’s Momentum ‘Clearly Strong’

U.S. stock futures were modestly higher in overnight trading after the S&P 500 Index stalled just short of its all-time high on Thursday. 

While encouraging news on trade deals could buoy sentiment, key inflation data due ahead of the market data could be the clinching catalyst for the day’s trading direction.

As of 11:19 p.m. ET on Thursday, the Dow futures climbed 0.20%, and the Nasdaq and S&P 500 futures rose about 0.14%. The Russell 2000 futures traded marginally higher.

Stocks advanced solidly on Wednesday, thanks to signals from Washington that the July 9 tariff deadline may not be critical. 

Data showing a steeper-than-previously reported contraction in the economy, a rise in continuing claims to a new post-2021 high, and the widening of the May trade deficit, as well as the potential replacement of Federal Reserve Chair Jerome Powell, all contributed to rate-cut hopes, perking up risk appetite. 

Communication services and energy stocks led the day’s gains, with only consumer staples and real estate finishing in the red for the day.

The S&P 500 Index stayed above the unchanged line throughout the session, rising to an intraday high of 6,146.52, just shy of the Feb. 19 all-time high of 6,147.43. The index trimmed some of the gains before ending at 6,141.02.

The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) rallied 0.95% and 0.78%, respectively.

Meanwhile, the SPDR Dow Jones Industrial Average ETF Trust (DIA) and the iShares Russell 2000 ETF (IWM)  jumped 0.95% and 1.62%, respectively.

On Friday, traders would look ahead to the May personal income and spending report, which includes the Fed’s preferred inflation gauge, the personal consumption expenditure (PCE) index.

The University of Michigan will release the final June consumer sentiment index at 10 a.m. ET. The preliminary reading released mid-month showed a sharp spike in the index to 60.2 from 52.2 in May.

Apogee Enterprises (APOG) is scheduled to report its results before the market opens.

Fund manager Louis Navellier expressed confidence that the market would end the second quarter at its year-to-date highs. In a note to clients, Navellier said the momentum remains clearly strong heading into the July 4th week, followed by the earnings season.

“Hopes remain that the Fed will cut in July, but whenever they start cutting and cash yields drop, there will be another wave of funds coming out of money markets looking for better yields,” he added.

Among commodities, crude oil futures continued to rise and traded above the $65.50-a-barrel mark, while gold futures have lost some of their luster.

The U.S. dollar traded lower against most major currencies, and the 10-year U.S. Treasury note yield edged up after pulling back sharply on Thursday.

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