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Stock index futures were in the green on Friday, as discussions on rate cuts take the spotlight, ahead of the Federal Reserve meeting next week.
S&P 500 futures (SPX) +0.2%, Nasdaq 100 futures (US100:IND) +0.1% and Dow futures (INDU) +0.2%.
The 10-year Treasury yield (US10Y) was down 2 basis points to 3.65%. The 2-year yield (US2Y) fell 6 basis points to 3.59%.
Major U.S. stock market averages closed higher Thursday, pushing past choppiness that followed wholesale prices rising above expectations.
“For equities, there was a fairly benign backdrop yesterday, and the news about the potential for a 50bp cut helped the S&P 500 advance. The index has now risen every day this week,” Deutsche Bank’s Henry Allen said.
“One theme markets are still debating this morning is whether the Fed are going to cut by 25bps or 50bps at their meeting next week,” Allen added.
It is widely expected that the Fed will start cutting interest rates at the meeting slated to take place next week.
“The economic data in the U.S. are very much signaling a soft landing. U.S. goods prices are in deflation,” UBS’ Paul Donovan said.
The Fed is late in cutting rates, but this data points toward several rate cuts, rather than a large initial cut. Cutting 0.5 percentage points might look like panic, Donovan added.
On the economic calendar, the September consumer sentiment is due later in the day, and it is expected to come in at 68.3.
“Today’s U.S. data adds little to our stock of knowledge. The Michigan consumer sentiment poll will reflect political partisanship,” Donovan said.
