U.S. stock futures were largely flat Friday after the S&P 500 hit an all-time record high on Thursday, driven by strong tech and communication services sectors. Global markets presented a mixed picture, with European stocks set to rise and Asian tech shares surging, while oil prices remained stable amid U.S.-Iran tensions. Additionally, Reddit is slated to join the S&P 500, sending its shares up 10% in after-hours trading.
Stock futures showed minimal movement early Friday following a record-setting session for U.S. equities. Two of the three major benchmarks are poised for their third consecutive week of gains, signaling continued bullish sentiment.
S&P 500 futures edged just above the flatline, while Nasdaq-100 futures saw a marginal dip. Dow Jones Industrial Average futures registered a modest gain of 20 points. On Thursday, the S&P 500 reached an intraday all-time high of 7,816.70, closing at a new record. The technology and communication services sectors were standout performers, each climbing approximately 1%.
Asian markets presented a mixed picture, with Japan's Nikkei 225 and Topix gaining 0.44% and 0.49% respectively, and South Korea's Kospi advancing 1.14%. Conversely, Hong Kong's Hang Seng index fell 0.93%, mainland China's CSI 300 slipped 0.12%, and Australia's S&P/ASX 200 was down 0.92%.
Anastasia Amoroso, chief investment strategist at Partners Group, expressed optimism, telling CNBC's "Closing Bell" that "The market is appropriately bullish right now," citing robust U.S. corporate earnings. FactSet data indicates S&P 500 companies are tracking around 50% earnings growth for the second quarter. Amoroso also highlighted the strong rebound in software, noting the iShares Expanded Tech-Software Sector ETF (IGV) is up about 28% in the past six months, following a 24% tumble in Q1.
Heading into Friday, the S&P 500 and Nasdaq Composite were on pace for their third consecutive weekly advances, up 0.5% and 0.4% respectively. The Dow, however, was down 0.4% week-to-date. Investors are awaiting July retail sales figures, expected at 8:30 a.m. ET, with economists forecasting a 0.1% month-over-month increase.
European Stocks Poised for Gains
European markets are set for a positive close to the week. Futures for the Stoxx 50 benchmark rose 0.3%, while Germany's DAX, the U.K.'s FTSE 100, Italy's FTSE MIB, and France's CAC 40 were all projected to open higher.
Yen Intervention Gains Unraveling
The Japanese yen strengthened slightly by 0.2% to 159.29 per dollar on Friday. However, despite a historic U.S.-Japan intervention two weeks prior, the yen remains under pressure from elevated oil prices and higher Treasury yields, favoring the dollar. The yen's proximity to the 160 level has fueled speculation about the effectiveness of intervention, with reports suggesting Japanese Prime Minister Sanae Takaichi's government now backs an interest rate hike.
Oil Prices Stable Amid Iran Tensions
Oil prices held steady on Friday as market participants weighed renewed U.S. threats against Iran against concerns about weakening global demand. Brent crude futures hovered at $86.99 per barrel, and U.S. West Texas Intermediate crude remained flat at $81.26 per barrel. Treasury Secretary Scott Bessent stated the U.S. would apply "economic measures that have never been seen on Iran," while Defense Secretary Pete Hegseth indicated the U.S. military could maintain an "indefinite" naval blockade of Iranian ports.
Asian Tech Stocks Surge
Asian technology stocks rallied on Friday, mirroring gains in U.S. tech driven by lower oil prices and flat producer price inflation, fostering a risk-on environment. Japan saw SoftBank Group jump 5.08%, Tokyo Electron add 2.13%, Advantest rise 4.02%, and Kioxia climb 3.87%. In South Korea, SK Hynix gained over 6%, and Samsung Electronics was up 2.05%. The region's semiconductor-heavy market has experienced significant volatility recently.
Reddit to Join S&P 500
Social media platform Reddit (RDDT) is set to join the S&P 500 on August 18, replacing AvalonBay Communities (AVB). Following the announcement, Reddit shares surged 10% in after-hours trading. Reddit has had a volatile year, down 31% year-to-date. AvalonBay, a real estate investment trust, will be acquired by Equity Residential, with the combined entity continuing to trade on the S&P 500 under the new name Vivmark Residential.
Bullish Investor Sentiment Declines Slightly
The latest American Association of Individual Investors (AAII) weekly survey showed a slight dip in bullish sentiment among individual investors, narrowing to 34.7% from 37.0%, remaining below the historical average. Bearish investors were largely unchanged at 37.9%, significantly above the long-term average, while neutral investors increased to 27.4%. The survey is often considered a contrarian indicator.
Key Market Factoids
Thursday marked the Dow's first positive day in four, while the S&P 500 and Nasdaq recorded back-to-back gains for the first time since August 4, with the S&P 500 enjoying its best day since then. Communication services led the S&P sectors with a 1.6% gain, while materials lagged. Week-to-date, the Dow is set for its first negative week in three, but the S&P 500 and Nasdaq are on track for their third consecutive positive week, a streak not seen since May. Energy has been the top performer this week, up 5.9%, while consumer discretionary has underperformed, down 1.6%.
