U.S. Stocks May Move To The Upside In Early Trading

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to move to the upside after ending yesterday’s volatile session modestly lower.

Traders may once again look to pick up stocks at reduced levels following recent weakness on Wall Street, which has seen the Nasdaq and the S&P 500 close lower for five straight sessions.

The tech-heavy Nasdaq saw wild swings over the course of the trading day on Thursday before ending the day at its lowest closing level in a month.

Stocks moved notably higher early in the session on Thursday but failed to sustain the upward move and fluctuated over the course of the trading day.

The major averages swung back and forth across the unchanged line in morning trading before sliding more firmly into negative territory in the early afternoon only to regain ground in the latter part of the session.

The major averages eventually ended the day modestly lower. The Dow fell 151.95 points or 0.4 percent to 42,392.27, the Nasdaq dipped 30.00 points or 0.2 percent to 19,280.79 and the S&P 500 slipped 13.08 points or 0.2 percent to 5,868.55.

The early strength on Wall Street came as some traders looked to pick up stocks at relatively reduced levels following the notable downward move seen to close out 2024.

Buying interest waned shortly after the start of trading, however, as a Labor Department report showing an unexpected decline by weekly jobless claims seemingly provides support for the Federal Reserve’s measured approach to lowering interest rates.

The report said initial jobless claims slipped to 211,000 in the week ended December 28th, a decrease of 9,000 from the previous week’s revised level of 220,000.

The dip surprised economist, who had expected jobless claims to inch up to 222,000 from the 219,000 originally reported for the previous week.

With the unexpected decrease, jobless claims fell to their lowest level since hitting 209,000 in the week ended April 27, 2024.

“The claims data are consistent with a labor market that is strong enough to allow the Federal Reserve to proceed with rate cuts at a more measured pace in 2025,” said Nancy Vanden Houten, Lead US Economist at Oxford Economics.

She added, “Our baseline is for three rate cuts this year, although the risk following the mid-December FOMC meeting is for fewer cuts.”

The subsequent volatility may have reflected below average volume, as many traders remained away from their desks following the New Year’s Day holiday on Wednesday.

The modestly lower close by the broader markets came amid a slump by shares of Tesla (TSLA), with the electric vehicle maker plunging by 6.1 percent after reporting a decrease by annual deliveries in 2024.

Tech giant Apple (AAPL) also tumbled by 2.6 percent following news the company is offering discounts on its latest iPhone models in China amid heightened competition.

Despite the modestly lower close by the broader markets, gold stocks moved sharply higher on the day, resulting in a 4.4 percent spike by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid a jump by the price of the precious metal.

A surge by the price of crude oil also contributed to significant strength among oil producer stocks, as reflected by the 1.3 percent gain posted by the NYSE Arca Oil Index.

Natural gas and brokerage stocks also saw considerable strength, while housing, airline and commercial real estate stocks showed notable moves to the downside.

Commodity, Currency Markets

Crude oil futures are rising $0.18 to $73.31 a barrel after surging $1.41 to $73.13 a barrel on Thursday. Meanwhile, after jumping $28 to $2,669 an ounce in the previous session, gold futures are slipping $4.70 to $2,664.30 an ounce.

On the currency front, the U.S. dollar is trading at 157.18 yen versus the 157.50 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0298 compared to yesterday’s $1.0265.

Asia

Asian stocks ended mixed on Friday despite hopes that China will follow through on its pledges to stimulate growth in the new year.

To steer demand for credit, China’s central bank is likely to cut interest rates from the current level of 1.5 percent “at an appropriate time” in 2025, the Financial Times reported.

The dollar held steady near two-year highs in Asian trading on expectations for higher-for-longer U.S. interest rates and amid the threat of tariffs from the incoming Trump administration.

Gold dipped on profit taking following a 1 percent gain in the previous session, bolstered by increased safe-haven demand.

Oil was little changed after surging to a two-month high the previous day, fueled by economic growth optimism in China and signs of falling U.S. crude inventories.

China’s Shanghai Composite Index tumbled 1.6 percent to 3,211.43 as investors braced for more economic pain in 2025.

Trade tensions and tariff worries also weighed on sentiment as China announced the enforcement of export control measures targeting 28 U.S. entities.

Hong Kong’s Hang Seng Index settled 0.7 percent higher at 19,760.27, giving up some early gains.

Japanese markets were closed for a holiday. Seoul stocks rallied as some positive news from the tech sector helped investors shrug off continued political uncertainty in the country.

The Kospi jumped 1.8 percent to 2,441.92 even as investigators from the corruption watchdog moved in early Friday to execute an arrest warrant for impeached President Yoon Suk Yeol over martial law.

SK Hynix surged 6.3 percent after the memory giant announced it would showcase its AI memory technologies at CES 2025, to be held in Las Vegas from January 7-10.

Australian markets closed higher, led by financials and energy stocks. The benchmark S&P/ASX 200 Index climbed 0.6 percent to 8,250.50, while the broader All Ordinaries Index ended 0.6 percent higher at 8,511.90.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index dropped 0.3 percent to 13,067.83 amid concerns that U.S. President-elect Donald Trump’s policies on tariffs may fuel inflation.

Europe

European stocks have moved modestly lower during trading on Friday at the end of a holiday-shortened week.

The pan-European STOXX 600 Index is down 0.3 percent at 509.09 but is on course for weekly gain.

The German DAX has dipped 0.4 percent as data showed Germany’s jobless rate remained unchanged in November.

According to the labor force survey results from Destatis, the unemployment rate came in at adjusted 3.4 percent in November, unchanged from October. The number of unemployed decreased 2,000 on month to 1.52 million.

France’s CAC 40 has slumped 1.0 percent a day after data showed the downturn in the euro zone and U.K. manufacturing sectors deepened at the end of 2024.

With a new minority government in place, the country is facing political instability. Market participants remain worried over how political rivals will agree on spending and taxation plans for 2025.

China-exposed LVMH, Kering and Hermes International have fallen as China announced “two new” initiatives to be funded by ultra-long-term bonds that aim to spur business investment and consumer-boosting initiatives.

The U.K.’s FTSE 100 is marginally lower in lackluster trading, with losses capped by a relatively weaker pound after new data from the British Retail Consortium showed a 2.2 percent decline in footfall on U.K. high streets in December.

Miners Anglo American, Antofagasta and Glencore have slid as copper prices held near five-month low on worries about potential U.S. tariffs ahead of Donald Trump’s presidential inauguration on Jan. 20.

Budget airline Wizz Air Holdings has also moved to the downside after an update on its share capital structure.

GSK edged up slightly after China granted approval for Nucala to treat adults with chronic rhinosinusitis with nasal polyps (CRSwNP).

Tullow Oil has soared after the West Africa-based company said it was exempted from a $320 million tax on its Ghana operations.

U.S. Economic News

The Institute for Supply Management is scheduled to release its report on activity in the manufacturing sector in the month of December at 10 am ET.

The ISM’s manufacturing PMI is expected to come in unchanged in December after rising to 48.4 in November, with a reading below 50 indicating contraction.

At 11 am ET, Richmond Federal Reserve President Thomas Barkin is due speak before the Maryland Bankers Association First Friday Economic Outlook Forum.

Federal Reserve Board Governor Adriana Kugler is scheduled to be interviewed on CNBC at 4 pm ET.