U.S. stock futures rise as the S&P 500 heads for its best week since April

U.S. stock futures rose on Friday with the S&P 500 headed for its best week since April in a comeback from last week’s swoon induced by worries about a tighter Federal Reserve.

Dow Jones Industrial average futures rose 89 points, or 0.3%. S&P 500 futures gained 0.1% and Nasdaq 100 futures added 0.2%.

The S&P 500, which closed at a record Thursday, is up 2.4% for the week so far, which would be its best gain since early April. The Dow is up 2.7% this week and the Nasdaq is up 2.4% since last Friday.

Nike‘s stock surged 12% in premarket trading, helping to boost sentiment for the Dow. The company after the bell reported earnings of 93 cents per share, far outpacing a Refinitiv consensus estimate by 42 cents per share. Revenue came in at $12.34 billion, topping the consensus forecast of $11.01 billion. Digital sales were up 41% since last year and 147% from two years ago.

Shares of the major U.S. banks popped after the Federal Reserve announced the industry could easily withstand a severe recession. The Fed, in releasing the results of its annual stress test, said the 23 institutions in the 2021 exam remained “well above” minimum required capital levels during a hypothetical economic downturn. The decision cleared the way for the banks to raise dividends and buy back more stock, which was suspended during the pandemic.

Bank of America and Wells Fargo rose 1.4% and 2%, respectively, in the premarket.

Investors will be watching for a key inflation indicator on Friday morning when the Commerce Department releases the core personal consumption expenditures index. Economists polled by Dow Jones are expecting prices rose 3.4% in May from a year earlier. Economists also estimate prices increased by 0.6% from April to May.

The index captures price movements across a variety of goods and services. It is also generally considered a wider-ranging measure for inflation as it captures changes in consumer behavior and has a broader scope than the Labor Department’s consumer price index. 

On Thursday, the Dow Jones Industrial Average jumped 322 points and the S&P 500 reached a new record of 4,266.49 after gaining 0.6%.

The technology-heavy Nasdaq Composite rose to a fresh record of 14,369.71 as investors continued to pour into growth stocks. Cathie Wood’s flagship fund, ARK Innovation, rose 1.5% and went positive for the year.

President Joe Biden announced Thursday that the White House struck an infrastructure deal with a bipartisan group of senators. The lawmakers have worked for weeks to craft a roughly $1 trillion package that could get through Congress with support from both parties. The framework will include $579 billion in new spending on transportation like roads, bridges and rail, electric vehicle infrastructure and electric transit, among other things.

Shares of Caterpillar jumped 2.6% on optimism around an infrastructure deal on Thursday. The shares were higher by another 1% in premarket trading Friday.

On the flipside Friday, FedEx dipped 4% in premarket trading despite beating on the top and bottom lines of its earnings. FedEx also gave a strong yearly outlook.

Last week, the Dow fell 3.5% and the S&P 500 shed 1.9% as the Federal Reserve moved up its timeline for interest-rate increases.

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Source: CNBC