By Niket Nishant and Tharuniyaa Lakshmi
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.
It has been a busy week for investors, with an interest rate hike from the Federal Reserve and Chair Kevin Warsh’s commentary on the future trajectory of borrowing costs.
They also reassessed the 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.
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 06:43 a.m. ET, Dow E-minis were up 62 points, or 0.12%, and S&P 500 E-minis were up 17.5 points, or 0.23%. Nasdaq 100 E-minis were up 148.75 points, or 0.5%.
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 the 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 27% premarket after it temporarily paused enrolment in tests for its experimental drug for major and bipolar depression following reports of side effects.
Berkshire Hathaway said Warren Buffett, its former CEO and one of the world’s most revered investors, will step down as chairman and become chairman emeritus, effective immediately. Shares of the company were flat in premarket trading.
Big Tech shares gained, with Alphabet and Nvidia up about 2.5% and 0.7%, respectively, while Apple was up marginally.
(Reporting by Niket Nishant and Tharuniyaa Lakshmi in Bengaluru; Editing by Joyjeet Das and Devika Syamnath)
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