Upward Momentum May Lead To Continued Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Friday, with stocks poised to extend the strong upward move seen over the past several sessions.

The markets may continue to benefit from recent upward momentum, which has contributed to a six-session winning streak for the S&P 500.

The S&P 500 and the Nasdaq once again reached their best closing levels in over a year on Thursday, while the Dow set a new six-month closing high.

Buying interest may be somewhat subdued, however, as some traders are likely to take a breather to assess the near-term outlook for the markets.

Following yesterday's avalanche of data, the U.S. economic calendar is relatively quiet today, although traders are still likely to keep an eye on a preliminary report on consumer sentiment in June.

The report from the University of Michigan includes readings on inflation expectations that could impact the outlook for interest rates.

While the Federal Reserve has forecast additional rate hikes this year, traders seem to be questioning whether the central bank will follow through.

CME Group's FedWatch Tool is currently pointing to just one quarter point rate hike compared to the two forecast by the Fed.

Following the mixed performance seen in the previous session, stocks moved sharply higher over the course of the trading day on Thursday. The Nasdaq and S&P 500 once again reached their best closing levels in over a year, while the Dow set to a six-month closing high.

The major averages pulled back off their highs of the session going into the close but held on to strong gains. The Dow shot up 428.73 points or 1.3 percent to 34,408.06, the Nasdaq jumped 156.34 points or 1.2 percent to 13,782.82 and the S&P 500 surged 53.25 points or 1.2 percent to 4,425.84.

The rally on Wall Street seemed to reflect optimism about the outlook for interest rates following the release of a slew of U.S. economic data.

While the Federal Reserve forecast further rate hikes on Wednesday, traders seem hopeful the central bank will not follow through.

The optimism partly stemmed from a report from the Labor Department showing initial jobless claims held at their highest level since October 2021 in the week ended June 9th.

The Labor Department said initial jobless claims came in at 262,000, unchanged from the previous week's revised level.

Economists had expected jobless claims to dip to 249,000 from the 261,000 originally reported for the previous week.

A separate Labor Department report showing import prices in the U.S. fell by much more than expected in the month of May has also generated optimism about the outlook for inflation.

The report said import prices slid by 0.6 percent in May, reflecting a sharp pullback in prices for fuel imports and a modest decrease in prices for non-fuel imports. Economists had expected import prices to edge down by 0.1 percent.

"Nonfuel import prices along with the consumer and producer prices suggest that inflation is moderating," said Matthew Martin, US Economist at Oxford Economics. "Therefore, it's unlikely that the Fed follows through with their plan to hike rates in the second half of this year."

Meanwhile, separate reports showed an unexpected increase in retail sales and an unexpected decrease in industrial production.

Software stocks saw substantial strength on the day, with the Dow Jones U.S. Software Index surging by 2.7 percent to its best closing level in well over a year.

Considerable strength also emerged among interest-rate sensitive housing stocks, as reflected by the 1.7 percent jump by the Philadelphia Housing Sector Index. The index also reached a more than one-year closing high.

Transportation stocks also showed a significant move to the upside, driving the Dow Jones Transportation Average up by 1.6 percent to its best closing level in three months.

Financial, oil service and healthcare stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are inching up $0.18 to $70.80 a barrel after surging $2.35 to $70.62 a barrel on Thursday. Meanwhile, after inching up $1.80 to $1,970.70 an ounce in the previous session, gold futures are rising $7.80 to $1,978.50 an ounce.

On the currency front, the U.S. dollar is trading at 141.01 yen versus the 140.29 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0961 compared to yesterday's $1.0945.

Asia

Asian stocks rose broadly on Friday as the Bank of Japan maintained ultra-low interest rates and reports suggested that Beijing officials are stepping up plans to jump-start China's recovery.

Chinese shares rose notably as investors bet on more and effective economic stimulus in China to lift slowing growth. There were reports authorities are considering a broad stimulus package to support the housing market and get consumers spending.

China's Shanghai Composite Index climbed 0.6 percent to 3,273.33, while Hong Kong's Hang Seng Index rallied 1.1 percent to 20,040.37.

Japanese stocks reversed course to end higher after the Bank of Japan maintained its ultra-easy monetary policy and signaled no change to its quantitative easing and yield curve control policies.

The Nikkei 225 Index gained 0.7 percent to close at 33,706.08, marking a fresh three-decade high and posting its 10th consecutive weekly gain. The broader Topix settled 0.3 percent higher at 2,300.36.

Optical products company Canon soared 4.9 percent on share buyback news. Rival Olympus rallied 3.8 percent and Nikon surged 4.5 percent.

Seoul stocks advanced to snap a two-day losing streak. The Kospi gained 0.7 percent to close at 2,625.79 after U.S. economic data released overnight pointed to solid consumer demand and easing inflation.

Flag carrier Korean Air Lines jumped 4.8 percent and state-run electricity provider Korea Electric Power added 1.4 percent, while energy firm SK Innovation fell 1.4 percent.

Australian markets rose for a fifth consecutive session, led by energy stocks. The benchmark S&P/ASX 200 Index jumped 1.1 percent to 7,251.20, marking its highest level since May 23. The broader All Ordinaries Index closed 1.1 percent higher at 7,451.20.

AGL Energy shares soared 9.7 percent after the electric and gas company announced it had signed a three-year deal with energy giant BP to provide easier access to electric vehicle charging points for users in New South Wales.

Across the Atlantic, New Zealand's benchmark S&P/NZX-50 Index climbed 1.0 percent to 11,800.04. Investors shrugged off data showing that the country's manufacturing sector continued to contract in May.

Europe

European stocks have moved higher on Friday after final data from Eurostat showed the region's consumer inflation sharply decelerated in May.

Eurozone consumer inflation was flat month-on-month in May, resulting in a 6.1 percent annual increase, down from 7.0 percent in April.

Earlier today, the International Monetary Fund (IMF) called for more interest rate hikes from the European Central Bank (ECB) in a regular review of the economy of the 20 countries sharing the euro.

The Bank of England will announce its rate decision next week, with the central bank expected to raise interest rates by a quarter point to a 15-year high of 4.75 percent, marking its 13th straight rate rise.

While the French CAC 40 Index has rallied by 1.0 percent, the German DAX Index is up by 0.4 percent and the U.K.'s FTSE 100 Index is up by 0.2 percent.

GSK has moved to the upside. The drug maker said the U.S. Food and Drug Administration has extended the review period for its experimental drug momelotinib.

China-related stocks are also moving higher, with LVMH and Hermes International both rising around 1 percent in Paris on hopes for additional Chinese stimulus.

On the other hand, Belgian chemicals group Solvay has fallen after unveiling new names for companies amid a demerger.

Travis Perkins, a British supplier of building materials, has also slumped after lowering its full-year profit guidance, citing difficulties in the country's housing market.

Retailer Tesco has also moved to the downside after it reported a 9 percent rise in underlying U.K. sales in its latest quarter.

U.S. Economic Reports

The University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of June at 10 am ET. The consumer sentiment index is expected to inch up to 60.0 in June from 59.2 in May.

Stocks In Focus

Shares of Virgin Galactic (SPCE) are skyrocketing in pre-market trading after the aerospace and space travel company said its first commercial spaceflight, 'Galactic 01,' is planned to fly between June 27 and June 30.

Software company Adobe (ADBE) is also likely to see initial strength after reporting better than expected fiscal second quarter results and raising its fiscal third quarter and full-year guidance.

Meanwhile, shares of SoFi Technologies (SOFI) may come under pressure after Piper Sandler downgraded its rating on the financial technology company's stock to Neutral from Buy.