US stock index futures rose on Friday as investors waited for a key inflation metric that had helped push the S&P 500 index and the Nasdaq Composite to another record high, a day after an agreement on infrastructure spending was reached.
Bank stocks were on course to rise after the results of the Federal Reserve's latest stress tests on Thursday showed companies had enough capital to weather a severe global recession, allowing them to return to paying dividends and buying back stocks.
What are the most important benchmarks doing?
Futures on the Dow Jones Industrial Average
rose 90 points, or 0.3%, to 34,182.
S&P 500 futures
rose 4.15 points, or 0.1%, to 4,260.25 points.
Nasdaq 100 futures
gained 18 points, or 0.1%, to trade at 14,372.25.
On Thursday the Dow
ended up 322.58 points higher, up 1% at 34,196.82 points. The S&P 500
rose 24.65 points, or 0.6%, to 4,266.49 points, beating its previous record June 14th, during the Nasdaq Composite
rose 0.7% to hit its 17th record close in 2021.
What is driving the market?
Stocks have rallied fully, and some more, from the swoon that followed last week's Federal Reserve meeting. Shares were bolstered Thursday by the Washington settlement on a roughly $ 1 trillion infrastructure plan that includes roughly $ 579 billion in new spending, analysts said, despite President Joe Biden and the Democrats in Congress signaling that they have additional spending on education, childcare and clean energy in a separate package.
Read: Infrastructure and markets – that's $ 1 trillion
However, inflation data should come back into the spotlight on Friday. Publication of May Personal Income and Expenditure data is due at 8:30 a.m. [East Coast Time]. Economists estimate that revenue will decrease by 2.7% while spending will increase by 0.4%.
The core PCE deflator, the Fed's preferred inflation meter, is expected to rise 0.6%.
“All that remains is to see US personal income and expense data, which shows us declines in incomes, how much expense was held with a switch to services, and how much the core PCE deflator took in. “Kit Juckes, Global Macro Strategist at Société Générale, said in a note.
"The risk is that an upside surprise in PCE deflators could cause a nerve attack in the bond market, which then spreads to stocks and props the dollar," he said.
The Fed announced after close of trading on Thursday that temporary restrictions on dividend payments and share buybacks at the country's largest banks could end after June 30th.
See: The Fed's stress test shows that large banks can withstand the global recession, pave the way for withdrawals and resume share buybacks
The University of Michigan preliminary consumer sentiment index for June is due to be released at 10 a.m. Economists expect the value to rise from 86.4 in May to 86.5.
Several Fed officials, including Cleveland Fed President Loretta Mester, Boston Fed President Eric Rosengren, and New York Fed President John Williams, will also speak at various events on Friday.
Which companies are in focus?
Proportions of the Dow component Nike Inc.
rose more than 11% in pre-hours trading after the company topped Wall Street revenue estimates by more than $ 1 billion late Thursday, a turnaround from the year-ago quarter when sales were impacted by the COVID-19 pandemic .
Shares in Virgin Galactic Holdings Inc.
rose more than 11% after the company said it received Federal Aviation Administration approval to fly passengers into space.
Shares rose 0.2% after the company, a popular Meme stock, reported lower-than-expected adjusted quarterly loss and sales that exceeded expectations late Thursday.
Shares in major banks, including Bank of America Corp.
JP Morgan Chase & Co.
and Citigroup Inc.
were slightly higher in pre-trading after the Fed stress tests.
Shares in CarMax Inc.
surged more than 6% after results were announced early Friday that exceeded Wall Street projections, fueled by soaring demand for used cars.