US equity futures rallied Thursday on stronger-than-expected tech earnings and signs the Trump administration may be close to announcing the first round of trade deals to reduce planned tariffs.
Contracts for the S&P 500 and Nasdaq 100 both gained at least 0.9%, helped by a post-market rally for Microsoft Corp. and Meta Platforms Inc. following their bullish corporate results. Microsoft posted better-than-expected sales, while Meta also exceeded analysts’ sales forecasts, suggesting customer demand hasn’t been rattled by tariffs.
The advance for US futures came after the S&P 500 erased an intraday drop of more than 2% Wednesday to close 0.2% higher. Shares in Japan and Australia both edged lower Thursday. A number of markets are shut for holidays across Asia including Mainland China, Hong Kong, Singapore and India.
Sentiment toward US equities was boosted Wednesday after President Donald Trump’s trade representative said the country was nearing an announcement of a first tranche of trade deals that would see the White House reduce planned tariffs on trading partners.
Treasuries edged lower across the curve in Asia, while index of the dollar was little changed. The yen traded in a narrow range before a Bank of Japan meeting where policymakers are expected to keep settings on hold for a second gathering.
US stocks has slumped in early trading Wednesday after data showed the economy contracted at the start of the year for the first time since 2022. The rebound was partly helped by a report that the US has been proactively reaching out to China through various channels. At the same time, a cohort of investors is betting the Fed will administer its policy medicine to forestall a recession.
“Weak data could hasten Fed cuts,” said Fawad Razaqzada at City Index and Forex.com. “The Fed is now more likely to step in sooner with its rate cuts to support an ailing economy, while the weakness in data could also encourage Trump to ease off on tariffs and make deals quicker.”
The stock recovery was also assisted by separate data that showed a jump in consumer spending, while a key inflation gauge decelerated.
Wednesday’s economic numbers give investors and the Fed a better read on the state of the economy heading into the tariff shock, according to Krishna Guha at Evercore. But the relative magnitude of these effects may not become clear until some time in the third quarter, he said.
“This presents the Fed with a dilemma as to whether it should wait to July/September or consider cutting in June anyway because the risk of delay is too high, even though it may not have as much clarity on the outlook as it would like,” Guha said.
Tesla board members have reached out to several executive search firms to work on a formal process for finding a new chief executive to replace Elon Musk, the Wall Street Journal reported, citing people familiar with the discussions.
Oil was little changed in Asia after settling below $60 a barrel Wednesday for the first time in three weeks as signs emerged that the Saudi-led OPEC+ alliance may be entering a prolonged period of higher production. Gold crept lower as traders assessed the Fed’s rate path after US data showed signs of downside risks under President Donald Trump’s trade agenda.
The US and Ukraine reached a deal over access to Ukraine’s natural resources Wednesday, according to a person familiar with the accord, a move that Kyiv sought to solidify Trump’s backing in ceasefire talks with Russia.
To Louis Navellier, chief investment officer at Navellier & Associates., what happens next very much depends on the tariff developments.
“If we get a series of announcements soon of trade agreements reached, optimism will rise, and the Fed will likely cut soon,” he said. “If things drag out for weeks and months, the damage to supply chains and inevitable near-term inflation could cause shouts of stagflation and be very bearish for stocks.”
Some of the main moves in markets:
This story was produced with the assistance of Bloomberg Automation.
Written by: Richard Henderson @Bloomberg
The post “ US Futures Extend Wall Street Gain on Tech Results: Markets Wrap” first appeared on Bloomberg
