S&P 500 and Nasdaq Futures Rise, Yen Pares Gain: Markets Wrap

4[ykedq0199{kf(a0fcc20pb_media_dl_1.png Bloomberg

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(Bloomberg) — US equity-index futures advanced, signaling that a rally which pushed Wall Street gauges to record highs on strong megacap tech earnings may have further to run. The yen edged lower, paring some of its gains triggered by Japan’s intervention.

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Contracts for the S&P 500 Index and the tech-heavy Nasdaq 100 climbed 0.2% after the underlying gauges closed at all-time highs on Thursday, on optimism about the outlook for US company earnings. Apple Inc. shares rose in extended trading after delivering a strong revenue forecast, even as it warned of higher memory-chip costs.

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Meanwhile, the yen was slightly weaker at around 157.18 per dollar after rising as high as 155.57 on Thursday. The currency had been approaching the 161 level before Japan’s government stepped in with its support. The country’s Nikkei stock index gained 0.7%, with several Asian markets shut for a holiday.

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Traders had plenty to contend with in April, as oil prices surged on the Middle East crisis with no resolution in sight, yet US stocks posted their best month since 2020, driven by a resurgence in technology shares and the artificial intelligence trade. Investors will test that narrative in the coming weeks, watching whether AI-led momentum can offset price pressures and geopolitical risks.

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“As long as the economy continues to grow and companies are able to grow earnings, we can see higher stock prices even in the face of higher energy prices and inflation,” said Chris Zaccarelli at Northlight Asset Management.

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While US gross domestic product accelerated during the first quarter, thanks to the massive upswing in AI business investment, it also showed inflationary pressures picked up sharply in March as the war spurred a surge in gasoline prices. The personal consumption expenditures price index — the Fed’s preferred measure of inflation — rose 0.7% last month, the most since 2022.

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Inflation concerns are increasing with European Central Bank policymakers likely to raise interest rates at their next meeting in June unless there are positive developments on energy prices and ending the Iran war, according to people familiar with the situation.

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“Investors will be watching how the Federal Reserve navigates this backdrop, with a likely more dovish chair entering what appears to be its most divided committee in decades,” said Bret Kenwell at eToro.

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What Bloomberg Strategists Say…

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The oil shock is showing up clearly in parts of FX and bond markets, yet US risk assets are trading as though the damage will be contained. The sustainability of that dynamic is becoming one of the most important debates in markets.

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— Michael Ball, Macro Strategist. For full analysis, click here. 

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In other corners of the market, US crude climbed 0.2% to trade around $105.30 a barrel after falling in the prior session. President Donald Trump said he was sticking with a naval blockade of Iranian ports as concerns mount that the vital Strait of Hormuz wouldn’t reopen anytime soon.