Futures Pointing To Initial Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to move back to the upside following the substantial downturn seen over the course of the previous session.

Traders may once again look to pick up stocks at reduced levels following the sharp pullback seen on Thursday, which extended a recent downward trend for the markets.

With yesterday's slump, the Nasdaq and the S&P 500 tumbled their lowest closing levels in over two months and the Dow fell to a new one-month low.

Buying interest may also be generated in reaction to remarks by New York Federal Reserve President John Williams that have helped renew optimism about the outlook for interest rates.

During remarks at the Central Bank of Chile Centennial Conference, Williams described monetary policy as being "modestly restrictive" and said he sees "room for a further adjustment" to rates in the near term.

Seemingly in response to Williams' remarks, CME Group's FedWatch Tool indicates the chances of a quarter point rate cut at the Fed's December meeting have soared to 70.9 percent from just 39.1 percent on Thursday.

However, it is worth noting that the minutes of the latest Fed meeting revealed officials have "strongly differing views" about whether to continue cutting rates in December.

After moving sharply higher early in the session, stocks showed a substantial downturn over the course of the trading day on Thursday. The major averages pulled back well off their early highs and tumbled firmly into negative territory.

The major averages ended the day just off their lows of the session. The Nasdaq plummeted 486.18 points or 2.2 percent to 22,078.05, the S&P 500 plunged 103.40 points or 1.6 percent to 6,538.76 and the Dow slumped 386.51 points or 0.8 percent to 45,752.26.

Early in the session, the tech-heavy Nasdaq had surged by as much as 2.6 percent, while the S&P 500 and the Dow had jumped by as much as 1.9 percent and 1.6 percent, respectively.

With the stunning reversal, the Nasdaq and the S&P 500 dropped to their lowest closing levels in over two months and the Dow fell to a new one-month low.

The early rally on Wall Street came amid a positive reaction to highly anticipated earnings news from market leader and AI darling Nvidia (NVDA).

Shares of Nvidia spiked by as much as 5.1 percent but pulled back sharply before closing down by 3.0 percent despite reporting better than expected third quarter results and providing upbeat guidance.

The subsequent downturn by the broader markets may have reflected concerns about the outlook for interest rates following the release of the Labor Department's long-delayed report on employment in the month of September.

While the report showed an unexpected uptick by the unemployment rate, job growth in September far exceeded economist estimates.

The Labor Department said non-farm payroll employment jumped by 119,000 jobs in September after a revised dip of 4,000 jobs in August.

Economists had expected employment to rise by 50,000 jobs compared to the addition of 22,000 jobs originally reported for the previous month.

At the same time, the report said the unemployment rate crept up to 4.4 percent in September from 4.3 percent in August. The unemployment rate was expected to remain unchanged.

The mixed data may have further eroded confidence that the Federal Reserve will lower interest rates by another quarter point in December.

Computer hardware stocks extended the sharp pullback seen over the past several sessions, dragging the NYSE Arca Computer Hardware Index down by 8.8 percent to its lowest closing level in over a month.

Substantial weakness was also visible among gold stocks, as reflected by the 5.4 percent nosedive by the NYSE Arca Gold Bugs Index. The sell-off by gold stocks came amid a decrease by the price of the precious metal.

Semiconductor stocks also showed a stunning downturn over the course of the trading day, with the Philadelphia Semiconductor Index plunging by 4.8 percent after surging by as much as 3.2 percent.

Networking, oil service and brokerage stocks also came under considerable selling pressure, moving lower along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are slumping $0.56 to $58.44 a barrel after falling $0.25 to $59 a barrel on Thursday. Meanwhile, after inching up $6.90 to $4,066.90 ounce in the previous session, gold futures are sliding $22.80 to $4,060 an ounce.

On the currency front, the U.S. dollar is trading at 156.84 yen versus the 157.46 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1520 compared to yesterday's $1.1527.

Asia

Asian stocks followed Wall Street lower on Friday as a brief Nvidia-led rally faded and mixed U.S. jobs data left markets uncertain whether the Federal Reserve will cut interest rates in December.

The dollar was set for a weekly gain as growing uncertainty about the Federal Reserve's interest rate path prompted a pullback from riskier assets.

Gold and oil prices fell more than 1 percent after Ukrainian President Volodymyr Zelenskyy agreed to work on the 28-point peace plan drafted by the U.S. and Russia.

Chinese markets joined a global sell-off, with the benchmark Shanghai Composite Index plunging 2.5 percent to 3,834.89.

Hong Kong's Hang Seng Index finished 2.4 percent lower at 25,220.02, extending losses for a sixth straight session after having fallen more than 3 percent to a three-month low earlier.

Japanese markets lost ground as tech stocks slumped amid concerns over stretched valuations and AI investment profitability. Concerns about Japan's fiscal situation also weighed on markets after the cabinet approved a massive economic stimulus plan.

Data showed earlier in the day that Japanese exports jumped 3.6 percent year-on-year in October, beating forecasts. Core inflation rose to a three-month high, supporting the case for rate hikes. Private-sector output grew at its fastest pace in three months on the back of resilient services.

The Nikkei 225 Index tumbled 2.4 percent to 48,625.88, while the broader Topix Index finished marginally lower at 3,297.73. Technology investor SoftBank Group plunged 10.9 percent and semiconductor test equipment supplier Advantest plummeted 12.1 percent.

Seoul stocks closed sharply lower as valuation concerns weighed heavily on big-cap tech shares. The Kospi nosedived 3.8 percent to 3,853.26. Samsung Electronics slumped 5.8 percent and SK Hynix lost 8.8 percent.

Australian markets hit a five-month low in a broad-based sell-off led by banks and miners. The benchmark S&P/ASX 200 Index dropped 1.6 percent to 8,416.50, while the broader All Ordinaries Index closed down 1.7 percent at 8,686.30.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.2 percent to 13,419.40.

Europe

European stocks have fallen on Friday as investors fret about overvalued tech stocks and an uncertain path for U.S. monetary policy.

In economic news, U.K. retail sales declined for the first time in five months in October as consumers delayed their spending in the lead up to Black Friday, the Office for National Statistics said.

Retail sales slumped 1.1 percent on a monthly basis in October, in contrast to the 0.7 percent increase in September. This was the first decrease in five months and worse than economists' forecast of a 0.1 percent dip.

Separately, British consumer confidence deteriorated in November ahead of the upcoming autumn budget, a private survey revealed. The consumer sentiment index dropped two points to -19.

Survey results published by S&P Global showed Eurozone private sector logged robust growth in the penultimate month of the year as services activity grew the most in a year-and-a-half.

The flash HCOB composite output index dropped marginally to 52.4 in November from 52.5 in October. The score was forecast to remain stable at 52.5.

Despite a marginal fall, the latest growth was among the sharpest in the past two-and-a-half years. Output has now increased in each of the past 11 months.

Currently, the German DAX Index is down by 0.4 percent, the U.K.'s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is just below the unchanged line.

France's TotalEnergies has fallen after it signed an agreement to acquire a 50 percent operating interest in OPL 257 from Conoil.

Lender BNP Paribas has also shown a notable move to the downside after lifting its capital ambitions.

Babcock International, a British aerospace, defense and nuclear engineering services company, has also declined after keeping its full-year guidance unchanged.

Meanwhile, property development and investment company Hammerson has rallied after it acquired the remaining 50 percent interest in The Oracle shopping center in Reading from its joint venture partner.

U.S. Economic News

Dallas Federal Reserve President Lorie Logan is scheduled to participate in a moderated panel before the "SNB and its Watchers 2025" event at 9 am ET.

At 10 am ET, the University of Michigan is due to release its revised reading on consumer sentiment in the month of November. The consumer sentiment index for November is expected to be upwardly revised to 50.5 from a preliminary reading of 50.3, which was down from 53.6 in October.

The Commerce Department is also scheduled to release its report on wholesale inventories in the month of August at 10 am ET. Wholesale inventories are expected to dip by 0.2 percent.