US stock futures rose during early morning trading on Friday, ahead of gains by major banks.
Futures contracts, which are linked to the Dow Jones Industrial Average, rose 88 points, or 0.24%. S&P 500 futures were up 0.28%, while Nasdaq 100 futures were up 0.38%.
All major moving averages slipped during Thursday's regular trading session. The Dow and S&P 500 fell 0.48% and 1.42%, respectively, marking their first day down in three days. At one point, the 30-stock benchmark was up more than 200 points.
The Nasdaq Composite was the relative underperformer, slipping 2.51% on a three-day winning streak as technology stocks suffered. Microsoft was down more than 4% while Nvidia was down 5%. Apple, Amazon, Meta, Netflix and Alphabet also closed lower.
As interest rate fears mount, investors have shifted from growth to value stocks, making future earnings – even from growth companies – less attractive.
"Big tech stocks are selling off so dramatically because 'yes, US rates are likely to keep going up this year,' but also because investors are focused on value and cyclical trades," said Ed Moya, Senior Market Analyst at Oanda. "Wall Street is trying to get a sense of how much growth will slow and banks will start providing some insights on Friday," he added.
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Companies have started releasing quarterly updates, but earnings season will be in full swing on Friday when JPMorgan, Citigroup and Wells Fargo report results ahead of the market open.
A range of economic data will also be released on Friday, including December retail sales figures. Economists expect the pressure to fall by 0.1%, according to Dow Jones estimates. In November, sales rose 0.3%, slower than the 0.9% economists had been expecting.
Industrial production figures are also reported, with The Street expecting a 0.2% increase. The consumer sentiment numbers will be released later on Friday morning.
The reports come as investors closely monitor all the latest inflation readings. The producer price index rose 0.2% in December from the previous month, the Labor Department said on Thursday, down from the 0.4% economists had been expecting. The report followed Wednesday's CPI, which rose 7% year on year in December, the fastest annual rate since 1982.
"Economic growth will remain strong and fears of inflation and the Fed will cool from boiling to simmering," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Company. "Supply chains and the labor market will catch up, and that will essentially kill two birds with one stone," he added.
With Thursday's move lower, the key moving averages for this week are now in negative territory. The Dow and S&P are headed for their second consecutive negative week, while the Nasdaq heads for a third week of losses.