U.S. stock futures pointed to further gains for Wall Street on Friday, as investors balance positive corporate earnings news with concerns about how rising COVID-19 cases might affect the economic recovery.
What are major indexes doing?
On Thursday, stocks finished modestly higher, with the Dow
DJIA,
What’s driving the market?
Markets brushed aside Thursday’s data showing a rise in weekly jobless benefit claims to send markets back up to near record levels. Technology stocks continued to curry favor with investors, with more positive earnings news late Thursday from Twitter and Snapchat parent Snap.
A strong performance by technology stocks has come amid concerns about the impact on the economy from rising numbers of cases of the highly contagious delta variant of coronavirus, notably in states that have seen lower vaccination rates.
“Investors are unsure what this update means for the economy’s recovery in the coming months. Investors should keep in mind that, at the height of the coronavirus pandemic, tech stocks provided a haven for distressed investors due to their higher-than-average earnings performance,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.
“Responding with the same strategy, investors are moving away from stocks positively correlated with economic cycles to tech stocks in an attempt to hedge their risk,” he said.
A light day for U.S. economic data will see Markit purchasing managers index readings for the manufacturing and services sectors released at 9:45 a.m. Eastern.
Meanwhile, investors were looking to the week ahead, which will feature a meeting of Federal Reserve policy makers and earnings from a number of tech heavyweights, including Tesla Inc.
TSLA,
“From the names seen so far, U.S. quarterly earnings have come in predictably strong, but they haven’t blown the lights out, with a market trying to understand the macro, and downwardly revised global Q3 growth estimates,” said Chris Weston, head of research at Pepperstone, in a note. “That should change this coming week and corporate earnings will provide big opportunities on a stock level.