Stock futures crawl higher after S&P 500 scores record close

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U.S. stock-index futures edged higher Friday, looking to end the week on a positive note after the S&P 500 index logged a record close despite another round of hotter-than-expected inflation data.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average YM00, +0.27% rose 76 points, or 0.2%, to 34,430.
  • S&P 500 futures ES00, +0.16% gained 6.30 points, or 0.2%, to trade at 4,235.
  • Nasdaq-100 futures NQ00, +0.06% were up 18.75 points, or 0.1%, at 13,969.50.

On Thursday, stocks ended higher, with the S&P 500 SPX, +0.47% gaining 0.5% to close at a record, taking out its previous all-time high finish set on May 7. The Dow Jones Industrial Average DJIA, +0.06% eked out a gain of 19.10 points, or 0.1%, while the Nasdaq Composite COMP, +0.78% advanced 0.8%.

What’s driving the market?

Stocks and government bonds rallied Thursday, despite data that showed the rate of U.S. consumer inflation over the past year escalated to a 13-year high of 5% from 4.2% in the prior month. That put it at the highest level since 2008, when the cost of oil hit a record $150 a barrel. Before that, the last time inflation was as high was in 1991.

“Could it mean that the market is wrong expecting an imminent downturn in inflation in the coming months?,” asked Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

“It could be, but the market remains firm on its position: inflation should ease shortly as two leading factors, the secondhand car prices, which explain a part of the current jump in U.S. CPI, should ease, and energy and commodity [prices] should consolidate, and ideally pull back from their multi-year high levels,” she said in a note.

That helps explain why the 10-year U.S. Treasury yield TMUBMUSD10Y, 1.459% slumped below 1.45% despite the inflation rise, the analyst said.

Read: U.S. Treasury yields fall despite higher inflation: Here are some reasons why

Meanwhile, a bipartisan group of senators — five Democrats and five Republicans — are pushing an infrastructure plan with $579 billion in new spending as negotiators try to strike a nearly $1 trillion deal on President Joe Biden’s top priority, according to those briefed on the plan.

Talks between Biden and Senate Republicans broke down earlier this week.

The U.S. economic calendar is light following Thursday’s data fireworks. A preliminary June consumer sentiment index reading is due at 10 a.m. Eastern.

Which companies are in focus?
  • Shares of Chewy Inc. CHWY, +2.03% were down 1.2% in premarket trade after the pet-products retailer surprised Wall Street late Thursday with a quarterly profit, but said it was facing labor shortages and supply problems that had led it to run out of some items.
  • Meme stocks remained in focus, with shares of AMC Entertainment Holdings Inc. AMC, -13.23% up more than 6% in premarket trading Friday, after falling 22.2% over the past two sessions. The stock and other meme stocks, took a hit Thursday after GameStop Corp.  GME, -27.16% disclosed that the Securities and Exchange Commission was looking into the “trading activity” around its stock and those of other companies. GameStop’s stock rose 6% ahead of Friday’s open, after tumbling 27.2% on Thursday. 
What are other markets doing?
  • The yield on the 10-year Treasury note TMUBMUSD10Y, 1.459% was down 1.4 basis points at 1.449%. Yields and bond prices move in opposite directions.
  • The ICE U.S. Dollar Index DXY, +0.28%, a measure of the currency against a basket of six major rivals, rose 0.3%.
  • Oil futures traded near unchanged, with the U.S. benchmark CL00, -0.04% little changd near $70.24 a barrel. Gold futures GC00, -0.40% edged lower, down 0.2% at $1,891.80 an ounce.
  • European equities rose, with the pan-Continental Stoxx Europe 600 SXXP, +0.61% and London’s FTSE 100 UKX, +0.60% each up 0.6%.
  • In Asia, the Shanghai Composite SHCOMP, -0.58% fell 0.6%, while Hong Kong’s Hang Seng Index HSI, +0.36% gained 0.4% and Japan’s Nikkei 225 NIK, -0.03% saw a fractional loss.