US stock futures rallied as early as Friday morning as investors tried to hold on to January’s rise despite fears about monetary policy and falling profits. Dow Jones Industrial Average index futures rose 45 points or 0.14%. S&P 500 and Nasdaq 100 futures recorded gains of 0.22% and 0.35%, respectively.
US data on the housing and labor markets, combined with a deeper analysis of the manufacturing sector, caused US indices to fall earlier on Thursday. Western European indices were also heavily impacted by fears that the Federal Reserve could hike rates more than expected, especially given that markets expect a 25 basis point hike.
The Nasdaq Composite rallied on Friday, mainly due to the performance of Netflix and Alphabet. Investors are trying to keep up with earnings seen in January as companies continued to report on their earnings. Shares of Netflix rose 7% on Thursday and 4.6% on Friday, even as its quarterly revenue was lower than analysts expected, as it had more subscribers than expected. Google’s parent company, Alphabet, saw its share price rise 5% on Thursday and 4.85% yesterday after reporting it would cut 12,000 jobs.
All major stock indexes closed their first week of three in a pattern. Recent economic reports showed slower economic progress, barring one notable case: Initial jobless claims hit their lowest point since April 2020. The whole picture signals heightened recession danger, but tight labor markets continue to support the firm stance of the Federal Reserve.
The standard 10-year US Treasury bond yield increased to 3.473% on Friday from 3.397% the day before. The dollar index also rose 0.4% to $102.44 on Friday morning.
After US markets closed lower on Thursday, Asian stocks rallied on Friday, with the Nikkei rising 0.55%, Hong Kong 1.55%, and Shanghai 0.77%. Asian stock indices rallied on Friday as enthusiasm for China’s economic recovery outweighed the relevance of a possible global recession and the possibility of other economies enacting further tightening measures.
European markets were stalled on Friday morning, failing to recover from Thursday’s losses, with the monetary policy outlook still in focus. The pan-European Stoxx 600 index has not undergone significant changes since early trading. Insurance shares gained 0.5%, while auto shares fell by the same amount.
In closing, the US stock indexes all closed with good gains: the S&P 500 gained 1.89% to 3,972.61, the Dow Jones rose by 1% to 33,375.49, and the Nasdaq made a +2.66 % to 11,140.44.