U.S. stock index futures were pointing to a second day of gains

Dow, S&P 500 struggle to hold gains after back-to-back Fed-inspired losses
April 7, 2022
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U.S. stock index futures were pointing to a second day of gains

U.S. stock index futures were pointing to a second day of gains on Friday, as investors continue to digest the Federal Reserve’s commentary on interest rates with key inflation data looming next week.

What’s happening

  • Futures on the Dow Jones Industrial Average YM00, 0.15% rose 108 points, or 0.3% to 34,598.
  • S&P 500 futures ES00, 0.01% gained 9 points, or 0.2%, to 4,505.25.
  • Nasdaq-100 futures NQ00, -0.16% rose 14 points, or 0.1%, to 14,550.

On Thursday, the Dow DJIA, +0.25%, S&P 500 SPX, +0.43% and Nasdaq Composite COMP, +0.06% shook off early weakness to end slightly higher.

What’s driving markets

The advance on Thursday came after two consecutive declines, following a hawkish speech from Fed Gov. Lael Brainard and the release of the minutes of last Federal Open Market Committee meeting, which sets the stage for a likely $95 billion per month reduction in the central bank’s balance sheet.

Analysts said stocks have also been underpinned by expectations for a strong first-quarter earnings reporting season, which kicks off in earnest next week when big banks report results.

“While we see Q1 earnings living up to market expectations, we think investors have been betting on good earnings as the market has rebounded from the uncertainty factors,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a note.

While stock indexes are unlikely to return to February lows, “we see a stagnant trading range as the Fed becomes more aggressive in fighting inflation,” he wrote. “In other words, carefully chosen individual stocks will likely beat the averages as a whole.”