Aug 21 (Reuters) – U.S. stock index futures inched up on Friday following a battering in the last session, in a week that saw elevated government bond yields and heightened geopolitical tensions weigh on investor sentiment.
All three main U.S. indexes were on track for weekly losses of about 2%, with the S&P 500 and the tech-heavy Nasdaq set to snap a three-week winning streak.
A jump in long-dated U.S. Treasury yields spooked markets this week as concerns over ballooning government debt, higher financing costs and persistent inflation fears dented sentiment. The yield on the 30-year Treasury bond hit its highest level since 2007 earlier this week.
The U.S. Treasury took note of the pressure in the bond markets, with Secretary Scott Bessent saying on Thursday that the government could further increase its Treasury repurchases after Wednesday’s surprise intervention.
Yields, however, were still hovering near recent highs.
Megacap and growth stocks had sold off on Thursday, with Nvidia closing lower for the fifth straight session.
Early on Friday, most megacaps were treading higher in premarket trading. Meta and Tesla led gains with an about 1% rise each.
At 05:57 a.m. ET, Dow E-minis rose 173 points, or 0.33%, S&P 500 E-minis gained 26 points, or 0.34%, and Nasdaq 100 E-minis were up 187 points, or 0.64%.
In early movers, Ross Stores gained 9% after the value retailer raised its annual profit forecasts and reported better-than-expected second-quarter results.
Crypto-linked companies continued to rise, with bitcoin touching its highest mark since late May after U.S. President Donald Trump called on Congress to pass a crucial crypto bill.
Exchange operator Coinbase Global added 6.7%, bitcoin-hoarder Strategy rose 10.2% and retail-investor platform Robinhood advanced 5.5%.
Broader risk sentiment, however, remained in check as Bessent said the United States will impose “the toughest sanctions in history” on Iran, a move he suggested would lessen the need for new major military operations.
The impasse between Washington and Tehran has helped keep oil prices higher, though crude prices were marginally lower on Friday. [O/R]
UBS Global Wealth Management raised its year-end target for the S&P 500 to 8,100, pointing to a stronger earnings outlook and confidence that corporate profit growth will remain robust into next year.
EYES ON WARSH, NVIDIA
Attention will now turn to next week’s major data releases and earnings that could provide equity markets with fresh direction.
A reading of the Personal Consumption Expenditures, the U.S. Federal Reserve’s preferred inflation gauge, and Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium could offer clues on the central bank’s rate trajectory.
Recent benign consumer and producer inflation numbers knocked down bets of an imminent rate hike from the Fed, with traders now only seeing a 34.6% chance of a rate hike by September, compared to 54.5% seen a month ago, according to the CME FedWatch Tool.
AI bellwether Nvidia is scheduled to report quarterly earnings next week, which could prove to be the next test of the AI trade following strong earnings from some AI infrastructure companies, along with major hyperscalers.
(Reporting by Avinash P in Bengaluru; Editing by Pooja Desai)
