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postUS stock futures rose on Friday as Wall Street looked to build on gains driven by strength in financials and technology shares, with winning weeks for the major averages still in play.
Contracts on the S&P 500 (ES=F) added 0.3%, while those on the Nasdaq 100 (NQ=F) led gains, up 0.5%. Dow Jones Industrial Average futures (YM=F), which include fewer tech names, inched roughly 0.2% higher after stocks reversed a two-day losing streak on Thursday.
Markets are poised for another winning day as TSMC (TSM) eyes more gains. The Nvidia (NVDA) and Apple (AAPL) supplier led a revival in AI enthusiasm on Thursday that boosted chip and AI stocks more broadly. A US-Taiwan trade deal bringing $250 billion chip and tech investment in American manufacturing also lifted spirits.
Smaller banks including PNC (PNC) and Regions Financial (RF) highlight Friday’s earnings docket, in focus after financial stocks rallied following upbeat earnings from major banks Goldman Sachs (GS) and Morgan Stanley (MS).
Heading into the end of a busy week, markets are digesting a flurry of political and geopolitical developments, including tensions involving Iran and Greenland and concerns surrounding the Federal Reserve’s independence.
In the midst of a legal battle between Trump’s administration and Fed Chair Jerome Powell, members of the Fed have been outspoken this week in support of maintaining rates at current levels in their bid to combat inflation. CME FedWatch has a 95% chance of rates remaining the same this month, with traders expecting the central bank’s first cut this year in June.
Despite Thursday’s rally, major indexes are on track to finish the week lower amid Wall Street’s first stretch of volatility in the new year. The S&P 500 (^GSPC) is down about 0.3% for the week, the Nasdaq Composite (^IXIC) is off roughly 0.6%, and the Dow (^DJI) is fractionally lower.
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Canada, breaking with US, agrees to cut tariff on Chinese EVs in return for lower tariffs
Canadian Prime Minister Mark Carney announced on Friday that Canada and China have reached a deal for Beijing to cut tariffs on its canola by March 1. This latest move between the two countries is a sign that the trade rift, which disrupted crop flows, is starting to thaw.
In return, Canada agreed to cut tariffs on Chinese electric vehicles. Canada will allow up to 49,000 Chinese EVs at a tariff of 6.1%, Carney said after talks with China’s leader, President Xi Jinping.
This is the first visit from a Canadian prime minister since 2017, as Canada seeks to build its strategic alliances with the country’s second-largest trading partner after the US.
It is also a sign that China may start to rebuild some of its strategic allies; it is also a signal that Canada may be breaking from the US.
Bloomberg News reports:
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Treasury market’s historic inertia is making investors anxious
Bloomberg reports:
The 10-year Treasury note’s (^TNX) yield is headed for a fifth straight week of minimal change, rivaling its longest stretch of inertia in the past two decades.
Since 2006, the median weekly range for 10-year yields has been 16 basis points. For the past five weeks, it’s been less than 10 basis points, the longest comparable stretch since 2020.
The trend — a function primarily of expected stability in US monetary policy — is stoking anxiety among bond-market investors because previous instances of constricted yield ranges have been followed by selloffs.
The 10-year note’s yield range of between 4.1% to 4.2% since mid-December has survived risk events including the December employment data, the US Justice Department’s actions against Fed Chair Jerome Powell and the prospect of American military action in Iran, Ian Lyngen, interest-rate strategist at BMO Capital Markets, observed in a report.
“Investors have been left to ponder what would be required to push 10-year yields to 4.25% or 4.05%,” Lyngen wrote.
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Oil prices drop as reduced chances of US intervention in Iran’s attack on civilians lower global supply fears
Reuters reports:
Oil prices fell in Asian trade on Friday, extending losses from the previous session, as concerns about supply risks eased after the likelihood of a U.S. strike on Iran receded.
Brent (BZ=F) was down 21 cents, or 0.3%, to $63.55 per barrel, while U.S. West Texas Intermediate (CL=F) fell 15 cents, or 0.3%, to $59.04 per barrel at 0418 GMT.
Both Brent and WTI rose to multi-month highs this week after protests flared up in Iran and U.S. President Donald Trump signalled the potential for strikes on the nation. Brent prices were still set for a fourth week of gains.
Late on Thursday, however, Trump said Tehran’s crackdown on the protesters was easing, allaying worries about possible military action that could disrupt oil supplies.
Brent prices have given back earlier gains but remain higher than a week ago, with the decline in prices spurred by Trump’s statement that he would hold off on military strikes on Iran, BMI analysts said in a note.
Read more here.
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Musk lawsuit against Open AI and Microsoft set to go to trial
Bloomberg reports:
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Silver prices slip from record after critical minerals tariff walked back
Bloomberg reports:
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