Futures were up early on Friday as investors as they cheered strong earnings results and digested hawkish comments from Fed officials, simultaneously.
Futures on the Dow Jones Industrial Average (DJIA) gained 0.39%, while those on the S&P 500 (SPX) jumped 0.57%, as of 5.40 a.m. EST, Friday. Meanwhile, the Nasdaq 100 (NDX) futures climbed 0.73%.
Companies that posted better-than-expected earnings results after the market closed on Thursday, including Gap (NYSE:GPS), Ross Stores (NASDAQ:ROST), and Palo Alto Networks (NASDAQ:PANW), buoyed after-market sentiments.
On Thursday, tech giant Cisco (NASDAQ:CSCO) gained 5% at the end of the regular trading session after posting solid earnings results.
Nonetheless, the major stock averages were down yesterday, with the S&P 500, the Dow, and the Nasdaq 100 shedding 0.31%, 0.02, and 0.19%, respectively.
Six officials of the Federal Reserve spoke at various events with a tone that investors have become quite familiar with by now. For instance, James Bullard, President of the St. Louis Federal Reserve clarified that the interest rate is not yet as restrictive as necessary, and the rate needs to be between 5% and 7% to effectively achieve the desired results. This is higher than what investors were gauging.
Needless to say, the U.S. Treasury yields got a boost with the short-term yield reaching 4.45% on the possibility that inflation has not cooled enough for the economy to recover.
Meanwhile, another piece of interesting information that came in was that large U.S. companies are actually increasing their capital spending even as fears of a potential recession loom. Capital spending among S&P 500 members is expected to have crossed $200 billion in the third quarter. This might encourage the Fed to keep increasing interest rates more aggressively.
Also, data on existing home sales and building permits are expected to be released on Friday, giving us another peak into the housing market. A cooling housing market is one of the indicators that the Federal Reserve’s policy strategy is working.
Read More: Stock Market Today: Futures Rise on Solid Earnings, Despite a Hawkish Fed