Futures Pointing To Modest Pullback On Wall Street

The major U.S. index futures are currently pointing to a slightly lower open on Friday, with stocks likely to give back ground following the rally seen in the previous session.

Traders may look to cash in on yesterday’s surge, which saw the S&P 500 end the day just shy of its record closing high.

Concerns about the strength on the economy may also weigh on Wall Street after the Commerce Department released a report showing retail sales in the U.S. fell by much more than expected in the month of January.

The report said retail sales slid by 0.9 percent in January after climbing by an upwardly revised 0.7 percent in December.

Economists had expected retail sales to edge down by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a 2.8 percent plunge in sales by motor vehicle and parts dealers, retail sales declined by 0.4 percent in January after advancing by an upwardly revised 0.7 percent in December.

The pullback surprised economists, who had expected ex-auto sales to rise by 0.3 percent compared to the 0.4 percent growth originally reported for the previous month.

While the data may raise some economic worries, it could also lead to renewed optimism about the outlook for interest rates following the release of hotter than expected inflation data earlier in the week.

Stocks moved sharply higher over the course of the trading day on Thursday, extending the significant recovery from the sell-off seen early in Wednesday’s session. The major averages all showed strong moves to the upside, with the tech-heavy Nasdaq leading the charge.

The major averages saw continued strength going into the close, ending the day near their high of the session. The Nasdaq surged 295.69 points or 1.5 percent to 19,945.64, the S&P 500 jumped 63.10 points or 1.0 percent to 6,115.07 and the Dow advanced 342.87 points or 0.8 percent at 44,711.43.

The rally on Wall Street came after the Labor Department released its report on producer price inflation in the month of January.

While the headline number rose by more than expected, components of the Federal Reserve’s preferred inflation reading were relatively tame.

The Labor Department said its producer price index for final demand rose by 0.4 percent in January after climbing by an upwardly revised 0.5 percent in December.

Economists had expected producer prices to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

Meanwhile, the report said the annual rate of producer price growth in January was unchanged from an upwardly revised 3.5 percent in December.

The annual rate of producer price growth was expected to slow to 3.2 percent from the 3.3 percent originally reported for the previous month.

“As in the CPI report, a big increase in energy prices and eggs pushed up the PPI in January,” said Bill Adams, Chief Economist for Comerica Bank. “There was also a big upward contributions from hotel and motel rates.”

He added, “However, the PPI also saw flat or negative readings on most types of healthcare services, which points to a cooler core PCE inflation report for January than the month’s core CPI, which rose 0.4%.”

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits fell by slightly more than expected in the week ended February 8th.

Stocks saw further upside after President Donald Trump signed a memorandum calling on members of his administration to review plans for reciprocal tariffs on U.S. trade partners but stopped short of imposing the tariffs.

Computer hardware stocks showed a substantial move to the upside on the day, with the NYSE Arca Computer Hardware Index soaring by 4.5 percent to its highest closing level in almost seven months.

Significant strength was also visible among telecom stocks, as reflected by the 2.7 percent surge by the NYSE Arca North American Telecom Index. With the jump, the index reached a two-month closing high.

Biotechnology, brokerage and semiconductor stocks also saw considerable strength, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are rising $0.54 to $71.83 a barrel after edging down $0.08 to $71.29 a barrel on Thursday. Meanwhile, after climbing $16.70 to $2,945.40 an ounce in the previous session, gold futures are inching up $8.10 to $2,953.50 an ounce.

On the currency front, the U.S. dollar is trading at 152.13 yen versus the 152.80 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0495 compared to yesterday’s $1.0465.

Asia

Asian stocks rose broadly on Friday, Treasury yields dipped, and the dollar stabilized around a near three-week trough as U.S. President Donald Trump announced a delay in implementing reciprocal tariffs until April and TikTok returned on the U.S. app stores of Apple and Google.

Gold ticked higher in Asian trading, while oil edged up after settling on a flat note Thursday.

China’s Shanghai Composite Index ended 0.4 percent higher at 3,346.72 after a choppy session.

Hong Kong’s Hang Seng index spiked 3.7 percent to 22,620.33, with AI stocks leading gains on easing U.S.-China trade war fears.

Video games firm Tencent, smartphone maker Xiaomi and online services firm Meituan surged 6-7 percent.

Japanese markets fell notably as the yen strengthened on BoJ rate hike bets. The Nikkei 225 Index dropped 0.8 percent to 39,149.43, snapping a three-day rally due to profit taking and currency woes. The broader Topix Index settled 0.2 percent lower at 2,759.21.

Fast Retailing fell 1.6 percent and Tokyo Electron ended down over 2 percent, while Sony surged 8.7 percent after raising its profit forecast.

Nissan gained 2.6 percent and Honda Motor rose 2.5 percent after deciding against a possible $60 billion merger. Toppan Holdings soared 15.5 percent after an upbeat profit outlook.

Seoul stocks eked out modest gains to hit a three-month high. The Kospi ended up 0.3 percent at 2,591.05.

Australian stocks trimmed some gains after hitting a record high earlier. The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 8,555.80, while the broader All Ordinaries Index settled 0.2 percent higher at 8,825.10.

Tech stocks such as Xero and Zip rose around 1 percent each. Gold miner Newmont advanced 1.6 percent and Gold Road Resources added 1.2 percent.

AMP plunged nearly 15 percent after the wealth manager posted a 43 percent slide in full-year statutory profit, largely reflecting the sale of the firm’s advice arm. Cochlear plummeted 13.7 percent after missing profit expectations.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.6 percent to 12,989.18 after a survey showed manufacturing activity in the country expanded for the first time in nearly two years, with January’s PMI reaching 51.4.

Europe

European shares are turning in a mixed performance on Friday but remain on track for their eighth straight week of gains on growing optimism about a Russia-Ukraine peace deal and a delay in possible reciprocal U.S. tariffs.

The euro was firm after reports emerged that Ukraine’s President Zelenskiy won’t engage in talks with Russia at the upcoming Munich Conference.

In economic news, German wholesale prices increased for the second straight month in December, data from Destatis showed earlier today.

The wholesale price index advanced by a more-than-expected 0.9 percent from a year ago after rising 0.1 percent in December. Prices were forecast to grow 0.2 percent.

While the French CAC 40 Index is up by 0.4 percent, the U.K.’s FTSE 100 Index is down by 0.3 percent and the German DAX Index is down by 0.4 percent.

Birkin bag maker Hermes International has rallied after it reported a profit for its full year that increased from last year.

Jet engine maker Safran has also shown a notable move to the upside after revising up its profit and cash forecasts for 2025.

Meanwhile, French satellite operator Eutelsat Communications SA has tumbled after posting a wider net loss for the first half.

Lender HSBC has also moved to the downside in London on reports it plans investment banking job cuts beginning next week.

Likewise, warehousing giant Segro has also declined despite reporting a double-digit jump in profit in the year ended December 31.

U.S. Economic News

Partly reflecting a slump by auto sales, the Commerce Department released a report on Friday showing retail sales in the U.S. fell by much more than expected in the month of January.

The report said retail sales slid by 0.9 percent in January after climbing by an upwardly revised 0.7 percent in December.

Economists had expected retail sales to edge down by 0.1 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding a 2.8 percent plunge in sales by motor vehicle and parts dealers, retail sales declined by 0.4 percent in January after advancing by an upwardly revised 0.7 percent in December.

The pullback surprised economists, who had expected ex-auto sales to rise by 0.3 percent compared to the 0.4 percent growth originally reported for the previous month.

The Labor Department also released a report on Friday showing U.S. import prices increased by slightly less than expected in the month of January, although the report also showed U.S. export prices surged by much more than anticipated.

The Labor Department said import prices rose by 0.3 percent in January after inching up by an upwardly revised 0.2 percent in December.

Economists had expected import prices to climb by 0.4 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the report said export prices shot up by 1.3 percent in January after climbing by an upwardly revised 0.5 percent in December.

Economists had expected export prices to rise by 0.3 percent, matching the increase originally reported for the previous month.

At 9:15 am ET, the Federal Reserve is scheduled to release its report on industrial production in the month of January. Industrial production is expected to rise by 0.3 percent in January after jumping by 0.9 percent in December.

The Commerce Department is due to release its report on business inventories in the month of December at 10 am ET. Business inventories are expected to increase by 0.3 percent in December after inching up by 0.1 percent in November.

At 3 pm ET, Dallas Federal Reserve President Lorie Logan is scheduled to speak before the SW Graduate School of Banking 159th Assembly for Bank Directors.