Stock futures rose Friday after China said it could ease some Covid measures, constructing on optimism from lighter-than-feared inflation data that fueled a broad market rally within the previous session.
Futures tied to the Dow Jones Industrial Average added 152 points, or 0.5%. S&P 500 futures were up 0.5% and Nasdaq 100 futures rose 0.7%.
China pulled back some Covid restrictions including shortening quarantine time for international travelers by two days, in line with state media on Friday.
The news built on a rally that got here after the Bureau of Labor Statistics reported a smaller-than-expected rise in consumer prices for the month of October, giving investors hope that inflation could also be cooling. U.S. Treasury yields dropped after the info release, while tech stocks soared.
The most important averages on Thursday posted their biggest one-day rallies since 2020. The Dow jumped greater than 1,200 points. The S&P rose 5.5%, and the Nasdaq Composite surged about 7.4%.
All the indexes are on pace for a winning week. The Dow is up 4% on a weekly basis, while the S&P and Nasdaq are on pace for increases of 4.9% and 6.1%, respectively. The three averages are also on the right track for a positive month.
“Markets across the board are euphoric following the cooler CPI this morning… But today’s CPI report, while indicating that inflation is moving in the proper direction, doesn’t suggest that inflation has been rooted out of the broader economy,” said Quincy Krosby, chief global strategist for LPL Financial. “And it doesn’t suggest that Fed’s job to revive price stability is complete.”
October’s CPI increased 0.4% for the month and seven.7% from a yr ago. Respective estimates from Dow Jones were for gains of 0.6% and seven.9%.
Investors are looking forward to preliminary University of Michigan consumer sentiment data, due out at 10 a.m. ET.
