Aug 9 2024: Futures linked to Wall Street’s primary indexes surged on Friday, buoyed by dovish remarks from Federal Reserve officials and positive labor market data that helped enhance investor sentiment.
Chipmaker Nvidia (NASDAQ
) drove gains in major technology stocks during premarket trading, advancing by 2.5%.
Market Volatility Eases
The global financial markets experienced significant volatility earlier this week, driven by July’s disappointing jobs data and a yen surge following the Bank of Japan’s unexpected rate hike, which led to the unwinding of currency carry trades.
However, volatility has since diminished, with the CBOE Volatility Index dropping to 23.21 points, down from a high of 65.73 at the start of the week.
U.S. stocks rallied on Thursday after jobless claims data revealed a larger-than-expected decline, alleviating fears of a rapidly worsening labor market. Despite this, major indexes closed the week lower, with the Dow Jones down approximately 0.7%.
Fed Commentary and Future Rate Cuts
Comments from Federal Reserve officials supported the market rally, suggesting confidence that inflation is moderating enough to permit interest-rate cuts. Fed policymakers indicated that the size and timing of future rate reductions will depend on forthcoming economic data.
According to CME’s FedWatch Tool, money markets assign a 54.5% probability that the Fed will cut rates by 50 basis points in September, with expectations for two additional cuts by the end of 2024.
Investors are now awaiting next week’s consumer price index and retail sales data for July, which could provide further insights into the prospects for a soft landing for the U.S. economy.
At 5:20 a.m. ET, U.S. S&P 500 E-minis were up 22.25 points (0.42%), Nasdaq 100 E-minis gained 115.25 points (0.62%), and Dow E-minis rose 88 points (0.22%).
Stock Highlights
Among individual stocks, Elf Beauty saw an 8% drop following a forecast for annual sales and profits below estimates and concerns about potential price increases if tariffs on Chinese imports rise under a possible Trump administration.
SoundHound AI (NASDAQ
) rose 2.5% after surpassing Wall Street revenue estimates for the second quarter and raising its full-year revenue forecast.
Take-Two Interactive Software (NASDAQ
) increased by 5.6%, anticipating growth in net bookings for fiscal years 2026 and 2027 as it prepares for the release of the highly anticipated “Grand Theft Auto VI” next year.
