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U.S. equity futures nudged higher Friday, potentially lifting the S&P 500 past the 5,000 point mark at the start of trading, as investors push past a rise in Treasury bond yields while cautiously eying a set of inflation-revisions data prior to the opening bell.
Updated at 7:43 AM EST
Dollar dollar bills, y’all
The U.S. dollar index, which tracks the greenback against a basket of six major global currency peers, is on pace for its four weekly gain in succession, taking its year-to-date advance to just over 2.7%.
That’s second only to the 3.1% gain for global crude prices in terms of major commodity and financial market moves and compares to a 1.8% decline for gold and a 1.% gain for collective cryptocurrencies, according to data from Bank of America’s weekly ‘Flow Show’ report.
Good morning. The US dollar is up roughly 2.8% against the major trading currencies on the year as investors focus on growth differentials between the US & the rest. Dollar strength will damp any inflation via the import channel ahead of what I expect to be a significant 2H’24… pic.twitter.com/4N7mMi6mPR
— Joseph Brusuelas (@joebrusuelas) February 9, 2024
Stock Market Today
Stocks hit a new record high last night, with the S&P 500 briefly breaching 5,000 in the final minutes of trading before retreating to close at an all-time peak of 4,997.91 points and extending its 2024 gain to 4.72%.
The moves followed a late-session spike in Treasury yields, triggered in part by a big jump in global crude prices, hawkish commentary from Federal Reserve officials and yesterday’s stronger-than-expected reading of weekly jobless claims, which continued to underscore resilience in the U.S. labor market.
A solid auction of $25 billion of new 30-year bonds, which drew a notable increase in foreign buyers, put a cap on the moves. But 10-year note yields still ended the session 5 basis points higher at 4.168% and held steady at that level through the overnight session.
The chance of another move higher today is pegged to the 8:30 a.m. U.S. Eastern Time release of the Commerce Department’s annual revisions to the seasonal adjustments in CPI data.
Last year, the little-tracked revision lifted the 2022 tally to 4.3% from 3.1% and cemented the Fed’s “higher for longer’ interest-rate case.
“Recall that a year ago, when it looked like inflation was coming down quickly, the annual update to the seasonal factors erased those gains,” Fed Gov. Christopher Waller told an event at the Brookings Institution in Washington last month. “My hope is that the revisions confirm the progress we have seen, but good policy is based on data and not hope.”
In other markets, global oil prices were little changed following yesterday’s 3.2% surge, triggered in part by the Israeli government’s rejection of a cease-fire agreement proffered by Hamas.
Brent crude futures contracts for April delivery, the global pricing benchmark, were last seen trading at $81.61 per barrel. WTI contracts for March added 12 cents to change hands at $76.34 per barrel.
On Wall Street, futures tied to the S&P 500 suggest a 10 point opening bell gain, taking the benchmark past the 5,000 point mark, while those linked to the Dow Jones Industrial Average are indicating a 36 point advance.
The tech-focused Nasdaq, meanwhile is called 70 points higher at the start of Friday trading.
In overseas markets, cautious rate comments from European Central Bank officials have the euro trading at 1.0769 against the U.S. dollar and are lifting regional government bond yields. The moves are capping early gains in stocks.
The regionwide Stoxx 600 was marked 0.14% higher in early Frankfurt dealings, while Britain’s FTSE 100 edged 0.03% higher in London.
Overnight in Asia, Japan’s Nikkei 225 edged to a 34-year high, closing out the week with a 0.093% gain, while broader regional stocks slipped 0.15% into the close ahead of China’s Lunar New Year celebrations.