Sept 18 (Reuters) – Futures tracking the Nasdaq 100 led Wall Street higher on Friday, putting the tech-heavy index on course for weekly gains as a drop in oil prices tempered inflation concerns.
The moves will round out a busy week for investors, who digested an interest rate hike from the Federal Reserve and weighed Chair Kevin Warsh’s commentary for clues on the future trajectory of borrowing costs.
With the earnings season still a month away, commentary from top industry executives at a string of conferences this week gave markets an early read on corporate health and helped shape sentiment.
“The recent strength of S&P 500 earnings growth has raised investor concerns that the market is in an ‘earnings bubble’,” wrote Goldman Sachs’ chief US equity strategist Ben Snider.
“While there are indeed factors contributing to ‘over-earning’ today, our base case is for S&P 500 earnings growth to decelerate, not collapse, in coming years.”
At 4:50 a.m. ET, Nasdaq 100 E-minis were up 166.25 points, or 0.56%; Dow E-minis rose 83 points, or 0.16%, and S&P 500 E-minis gained 21.5 points, or 0.28%.
Investors also reassessed their outlook for AI demand this week after top industry executives urged a slowdown in the development of the technology. There is little clarity yet on what such a slowdown would look like.
OIL PRICE DROP EASES PRESSURE
Crude prices fell for a third straight day on Friday, as markets shrugged off supply concerns even as Saudi Arabia and Yemen’s Iran-backed Houthis exchanged fresh strikes across their border.
Brent crude futures and US West Texas Intermediate futures slipped nearly 2% each.
The declines have helped ease concerns surrounding price pressures, as the Middle East supply shock remains one of investors’ biggest worries on the inflation front.
Friday also marks the once-in-a-quarter simultaneous expiry of derivatives contracts tied to stocks, index options and futures, also known as “triple witching,” which can boost trading volume and exacerbate volatility.
Meanwhile, Xenon Pharmaceuticals tumbled nearly 28% premarket after it temporarily paused enrolment in tests for its experimental drug for major and bipolar depression following reports of side effects.
Big Tech shares were mixed, with Alphabet and Nvidia up about 2% and 1%, respectively. Apple dipped 0.2% and was the only decliner among the Magnificent 7 group of stocks.
(Reporting by Niket Nishant in Bengaluru; Editing by Joyjeet Das)
