S&P 500 futures held flat early Friday after the index rallied 1.1% on Thursday, recovering from a selloff triggered by the Federal Reserve's first rate hike in three years. The index remains down 0.3% for the week, even as the Nasdaq Composite holds a weekly gain.
S&P 500 rebounds a day after the Fed's hike
The S&P 500 rallied 1.1% on Thursday, while the Dow Jones Industrial Average closed higher by 316 points, or 0.6%, and the Nasdaq Composite jumped 1.7%. The bounce came one day after the Fed raised rates by a quarter percentage point — its first hike in three years — with the suggestion of at least one more increase this year, a move that had driven the major averages sharply lower Wednesday.
Early Friday, S&P 500 futures were trading flat, alongside Nasdaq-100 futures, while Dow futures edged up 41 points, or 0.08%. Asian markets moved higher overnight, with Japan's Nikkei 225 adding 1.90% and South Korea's Kospi advancing 2.67%.
Investors look past the rate path
Thursday's rally, especially in technology stocks, implies many investors are looking past the prospect of a higher-for-longer rate, or inflation, environment, returning instead to an artificial intelligence story that should continue to bolster corporate profits. According to CNBC: "At some point, all cycles end," Brian Levitt, chief global market strategist at Invesco, told the network's "Closing Bell." He added that the cycle would end when something breaks in the AI trade, not because of higher rates or oil prices.
The week stays mixed for the S&P 500
As of Thursday's close, the S&P 500 was lower by 0.3% for the week, and the Dow was down 1.5%, on track for a third straight losing week. The Nasdaq Composite was the only major average heading into Friday's session with a weekly gain, up 0.3%.
The week concludes Friday with more commentary from Fed officials. Fed Governor Michelle Bowman, a permanent voting member of the policy-setting committee, and Kansas City Fed President Jeffrey Schmid, a non-voting member, are set to speak. Investors will look for greater clarity into policymakers' thinking behind Wednesday's unanimous vote for the rate hike.
Source: CNBC
Trading involves risk.
Risk Disclaimer
