US Futures Tick Up After Stocks Gained for a Third Straight Day

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Key Takeaways

• US equity futures trade higher on Friday as quarterly earnings continue to come in
• Markets in Europe press ahead as the ECB vows to maintain the current policy and low rates

Stock futures edged higher in pre-market trading on Friday after investors created enough buying momentum to lift equities for a third straight day on Thursday. Futures contracts tied to the major indexes hover in the green today before the opening bell in New York. Nasdaq futures and S&P500 futures indicate a positive open by roughly 0.30% each. Dow Jones futures imply a higher open of about 0.25%.

The three major US stock gauges closed Thursday’s regular trading session on an upbeat mood, buoyed by the continued wave of strong corporate earnings for the second quarter of the year. The Dow rose modestly by 0.07%, while the S&P500 eked out a 0.2% gain. The tech-centered Nasdaq Composite added the most and closed 0.36% to the upside.

All three stock averages are on track to end the week comfortably in the green. After a tumultuous start of trading on Monday, stocks have erased their losses as market participants have increased their optimism that the outlook for growth remains robust.

Based on the closing prices on Thursday, the Dow Jones Industrial Average is up nearly 0.90% for the week. The S&P500 is higher by roughly 1.70% for the same time, while the Nasdaq Composite has gained over 3.15%.

A Positive Performance for European Markets

The strong rally in the tech sector was propelled by heightened investors’ expectations over the quarterly earnings reports by technology companies coming up next week. Big tech names such as Facebook, Amazon, and Microsoft, all closed higher by about 1.50% each. Salesforce gained 2.6%, leading the gains in the 30-stock Dow Jones index.

The elevated mood in growth stocks, tech, in particular, is poised to spread to next week when major technology companies report their financial results for the quarter ended June. Microsoft, Apple, Tesla, Facebook, Amazon, and Google-parent Alphabet are on the weekly agenda, set to report their earnings.

On the economic news front, initial jobless claims rose by 51,000 to a seasonally adjusted 419,000 for the week ended July 17. The higher number returned new claims near levels registered in early June.

In overseas stock market action, European bourses performed well on Thursday. A broad-market upside swing carried the pan-European Stoxx 600 higher by 0.56%, while country-based stock benchmarks delivered mixed results. The UK’s FTSE100 ended in the red by 0.43%. Spain’s IBEX35 advanced 0.64%. Germany’s DAX and France’s CAC40 gained 0.60%, and 0.26%, respectively.

The European Central Bank on Thursday announced it will maintain its current monetary policy approach. Central bankers in Europe had previously agreed to lift the inflation goal to 2% to be able to tolerate price increases moderately above the target. On that note, as ECB President Christine Lagarde announced the new inflation target, she also said the ECB expected inflation levels to come down as the economy recovers.

“The current increase in inflation is largely being driven by higher energy prices and by base effects from the sharp fall in oil prices at the start of the pandemic,” Lagarde said at a press conference on Thursday.

“As the economy recovers, supported by our monetary policy measures, we expect inflation to rise over the medium term, although remaining below our target. While measures of longer-term inflation expectations have increased, they remain some distance from our 2% target.”

Over to cryptocurrency, Bitcoin and alternative coins are trading higher in the early hours of Friday action. The flagship token is now hovering around $32,600, up about 1.50% on the day. The digital asset is currently trading in its third day of gains as the market mood has improved.