Stock-index futures traded slightly higher Friday, after the government said the U.S. economy grew 2.1% in second quarter, faster than expected, and with Wall Street on track to end a busy week for earnings on a positive note.
How are the major benchmarks faring?
Futures contracts on the Dow Jones Industrial Average YMU19, +0.16% rose 76 points, or 0.3%, to 27,169, while S&P 500 futures ESU19, +0.33% were up 7.5 points, or 0.2%, at 3,014.25. Nasdaq-100 futures NQU19, +0.44% were 22 points higher at 8,003.75, a gain of 0.3%.
Stocks edged lower Thursday, but the S&P 500 index and Nasdaq remain on track for weekly gains after posting record finishes earlier in the week. The Dow DJIA, +0.11% saw its largest one-day percentage decline in a month with a fall of just 0.5%, a statistic that underlined the lack of recent daily volatility in the market. The blue-chip gauge declined 128.99 points, or 0.5%, to end at 27,140.98.
The S&P 500 SPX, +0.47% fell 15.98 points, or 0.5%, to close at 3,003.67, while the Nasdaq Composite COMP, +0.89% shed 82.96 points, or 1%, to end at 8,238.54. The S&P and Nasdaq each posted a record close on Wednesday.
What’s driving the market?
The U.S. economy grew at an annualized pace of 2.1% in the second quarter, according to the Commerce Department, slowing from 3.1% in the first three months of the year, but faster than the 1.9% expected by economists, per a MarketWatch poll.
Some of the details of the report were stronger than the headline number, with consumer spending surging to 4.3% growth from a 1.1% gain in the first quarter. However, business investment shrunk 0.8%, the biggest drop in three and a half years, a figure that likely still provide enough cause for concern to keep the Federal Reserve on track to deliver an interest rate cut when it meets next week.
Read: The economy won’t get a great grade for the 2nd quarter, but GDP to show bright spots
The Fed is fully expected to cut interest rates by at least a quarter point when it meets July 30-31, and the European Central Bank on Thursday signaled it was prepared to cut rates as early as its next policy meeting in September, while also weighing a resumption of asset purchases in an effort to boost stubbornly low inflation back toward the bank’s target.
“High expectations on both sides of the Atlantic for central bank action are keeping valuations elevated across equity and fixed-income markets,” said Elia Lattuga, deputy head of strategy research at UniCredit Bank, in a note. “Meanwhile, uncertainty regarding global growth lingers and earnings growth seems set to stay low. This leaves risky assets exposed to a setback over the weeks to come.”
Meanwhile, a heavy week for second-quarter corporate results is coming to a close.
Which stocks are in focus?
Shares of Google parent Alphabet Inc. GOOG, +11.08% GOOGL, +10.96% were on track for a gain, rising more than 8.2% in premarket trade. After Thursday’s close, the company released second-quarter results that topped Wall Street profit and revenue expectations.
Also see: Big Tech antitrust probe leads to meeting between attorney general, state counterparts
Shares of Amazon.com Inc. AMZN, -2.39% will be in focus after the e-commerce giant reported results late Thursday that ended a year-long run of record quarterly profits. Amazon shares were off 1.4% in premarket action.
Intel Corp. INTC, +0.45% shares were up 4.9% ahead of the bell after the chip giant posted a big earnings beat and raised its outlook for the year late Thursday.
Opinion: Even Intel doesn’t seem to know what’s going to happen with Intel
Coffee retailer Starbucks Corp. SBUX, +6.31% shares rose 6.3% in premarket trade after it bested forecasts for profit and sales late Thursday and raised its guidance for the year.
Shares of social-media company Twitter Inc. TWTR, +8.53% were up 5.5% in premarket action, after the company posted better-than-expected user and revenue growth.
Dow component McDonald’s Corp. MCD, +1.71% reported second-quarter earnings and revenue that beat expectations, sending the stock up 2.6% before the start of trade Friday.
Shares of drugmaker AbbVie Inc. ABBV, +3.20% rose 1.7% after reporting second-quarter results Friday.
How are other markets trading?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.35% rose 1 basis point 2.087%.
Asian markets closed mixed overnight, with China’s CSI 300 000300, +0.19% index rising 0.2%, Japan’s Nikkei 225 NIK, -0.45% adding 0.5% and Hong Kong’s Hang Seng HSI, -0.69% losing 0.7% lower.
In commodities markets, the price of crude oil CLU19, +0.25% rose 0.7% to $56 per barrel, while gold prices GCQ19, +0.54% edged up 0.3% to $1,419 per ounce. The U.S. dollar index DXY, +0.08% added 0.1%.
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