By Johann M Cherian and Sukriti Gupta
(Reuters) – U.S. stock index futures rose on Friday, with both the index and the Dow looking set for their biggest weekly gains since November as investors await a wave of policy changes under the incoming Trump administration.
At 7:21 a.m. ET, the Dow E-minis were up 164 points, or 0.38%, the S&P 500 E-minis were up 21.5 points, or 0.36%, and the E-minis were up 93 .25 points, or 0.44%.
Better-than-expected earnings from major banks and signs that core inflation is cooling prompted risk-taking on Wall Street this week, putting the benchmark S&P 500 and the blue-chip Dow on track to post their steepest weekly gains since U.S. election week.
The S&P 500 banking index and regional banks outperformed the major indexes this week, posting gains of about 5.8% and 6.4%, respectively.
Also helping risk sentiment was a drop in longer-dated bond yields that touched more than 10-month highs earlier in the week. The yield on the benchmark 10-year bond is now at its lowest level in more than a week at 4.58%. [US/]
President-elect Donald Trump is expected to take over the White House on Monday, and investors will be braced for any insights into his plans on tax cuts, tariffs, lax regulations and immigration during his inaugural speech, which analysts widely expect could boost the economy.
The S&P 500 has gained nearly 3% year to date since Election Day, while the dollar is up about 5%.
However, concerns prevail that his plans on tariffs and immigration could spark a trade war and new price pressures, which could force the Federal Reserve to back off from further easing monetary policy.
“According to our math, (a stronger dollar) could reduce first-quarter earnings growth by about 1.5 percentage points,” UBS analysts said.
“However, we believe that some of the risk from the strong dollar has already been factored in and that the impact of tariffs is unlikely to be strong enough to prevent healthy earnings growth.”
At a time when recent data points to a resilient economy, Cleveland Fed President Beth Hammack said inflation remains a concern.
According to data compiled by LSEG, traders expect the central bank to leave interest rates on hold at its meeting later this month and see the first cut in June. Earlier in the week, they almost predicted a rate cut for 2025.
Before the market opens, investors will assess data on building permits, housing starts and industrial production for the month of December, which could help gauge the health of the world’s largest economy.
Eyes are also on developments around a ceasefire deal for the Middle East conflict, with Israel’s government due to give final approval, following concerns that the deal could be delayed.
Among others, Nvidia (NASDAQ: ) rose 0.9% and Broadcom (NASDAQ: ) rose 1.4% after Barclays (LON:) raised its price target on the stock.
SLB rose 2.2% after the oilfield services provider beat fourth-quarter profit estimates, thanks to stronger demand for its drilling equipment and technology in North America and international markets.
Truist Financial (NYSE: ) rose 2.9% after reporting a rise in fourth-quarter profit as it earned more in interest.
