U.S. stock-index futures struggled for direction on Friday, as investors wrestle with escalating tensions between the U.S. and major trading partners, though investors also focused on quarterly results from General Electric and Microsoft.
What are the main benchmarks doing?Futures for the Dow Jones Industrial Average YMU8, -0.34% fell 82 points, or 0.3%, to 24,978.00, and futures for the S&P 500 futures ESU8, -0.16% slipped 5.80 points to 2,799.25, a decline of 0.2%. Nasdaq-100 futures NQU8, +0.23% however, rose 19.75 points, or 0.3%, to 7,387.25
The Dow DJIA, -0.53% S&P 500 SPX, -0.40% and Nasdaq Composite COMP, -0.37% closed lower Thursday. The Dow broke a five-session win streak by falling 0.5% to 25,064.50, and the S&P 500 lost 0.4% to 2,804.49, led by a sell-off in the financial sector. The Nasdaq Composite Index shed 0.4% to 7,825.30.
Based on Thursday’s close, the Dow is up 0.2% for the week while the S&P is up 0.1%. The Nasdaq is flat.
What’s driving markets?In an interview with CNBC, President Donald Trump said he was “ready” to put tariffs on all Chinese goods imported to the U.S., which would amount to more than $500 billion. The comments were the latest in a series that pointed to worsening trade relations; on Thursday, Trump threatened “tremendous retribution” against the European Union and stood by a pledge to levy tariffs on automobile imports.
While corporate profits have been growing and economic data have been strong, investors are concerned that the trade tensions could escalate into a full-on trade war, which could have a hugely negative impact on growth, business spending, and sentiment.
Don’t miss: Trade tariffs mean companies will spend less on growing their business in 2019, says Fitch
In further drama coming out of Washington, Trump on Thursday said he’s “not thrilled” that the Federal Reserve is hiking interest rates as that could undermine his administration’s fiscal stimulus efforts. While the Fed is independent and unlikely to change its policies, a popular gauge of the U.S. dollar DXY, -0.11% pulled back after Trump’s comments, with the index of six major currencies against the buck hanging onto losses early Friday.
In the latest earnings news, General Electric Co. GE, -0.15% rose 2.7% in premarket trading after it reported earnings and revenue that beat expectations. The results come after a tumultuous year for the industrial conglomerate that included a leadership change, a halved dividend and its removal as the longest tenured component of the Dow.
Microsoft Corp. MSFT, -0.68% late Thursday posted fiscal fourth-quarter results that topped Wall Street’s expectations and issued a stronger-than-expected outlook for the first quarter. Shares climbed more than 3.5% and were likely to be among the biggest boosts to both the Dow and the Nasdaq.
See: Microsoft shows it deserves place among tech giants
What are strategists saying?“Tradition states that the U.S. President doesn’t comment on monetary policy but given that Trump is a bit of a wild card, it perhaps isn’t that surprising that Trump broke with tradition (for a second time),” said Jasper Lawler, head of research at London Capital Group, in an note.
“The reality is that Fed Chair Powell is very unlikely to adjust his decision making just because Trump wants a weaker dollar. At the margins, there is a tiny chance that some policy makers are less inclined to hike on the back of Trump’s comments, but this risk is extremely small,” he said.
Which stocks are in focus?Credit-card provider Capital One Financial Corp. COF, -1.77% , chip companySkyworks Solutions Inc. SWKS, +0.44% and medical robots pioneerIntuitive Surgical Inc. ISRG, -1.25% look on track for gains after their earnings beats late yesterday.
Skechers USA Inc.’s stock SKX, +1.84% appears set for a plunge after the shoemaker’s results and outlook disappointed.
VF Corp. VFC, +1.16% reported adjust first-quarter earnings that beat expectations, along with revenue that came in ahead of forecasts.
Schlumberger NV SLB, -0.21% reported adjust second-quarter earnings that beat expectations, but revenue that was slightly below forecasts.
Shares in FTD Cos. FTD, +1.35% are likely to see active trading after the beleaguered florist said late Thursday that its chief executive, chief operating officer and chief marketing officer are departing, and it’s restructuring and reviewing strategic alternatives.
What economic news is on tap?There are no top-tier U.S. economic reports slated to hit Friday, but St. Louis Federal Reserve President James Bullard is due to give a speech on the economy and monetary policy at 8:20 a.m. Eastern Time in Kentucky to the Glasgow-Barren County Chamber of Commerce.
What are other markets doing?European stocks SXXP, -0.25% were most lower and while Asian stocks ended mostly higher. Oil futures CLQ8, -0.01% are higher, while gold futures GCQ8, -0.03% are little changed.
