(Bloomberg) — U.S. futures steadied on Friday as investors turn their attention to the earnings season and away from concerns about Federal Reserve tightening. Treasury yields rose and the dollar was little changed.
Contracts on the S&P 500 and Dow Jones Industrial Average ticked up, while Nasdaq 100 futures were little changed after the benchmark fell to its lowest level since October. Technology companies, which are seen as most sensitive to higher rates, led declines in Europe and Asia after a slew of Fed officials signaled they’ll combat inflation aggressively.
Investors will focus on earnings over the next few weeks to assess companies’ performances amid soaring inflation, pandemic restrictions and backlogs. JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. are scheduled to report results.
“We are in a position where much that has been positive for equities is maybe moving to neutral or negative,” said Sarah Hunt, portfolio manager at Alpine Woods Capital Investors. “While there are still few alternatives, it makes the equity market ripe for more fluctuations over the next few months as we see how the data shake out and how the Fed reacts.”
Electricite de France SA plunged by a record as the French government confirmed plans to force it to sell more power at a steep discount to protect households from surging wholesale electricity prices, a move that could cost the state-controlled utility 7.7 billion euros ($8.8 billion) at Thursday’s market prices.
A majority of strategists still see the rally in European equities continuing this year. The Stoxx Europe 600 Index will rise about 5.2% to 511 index points by the end of 2022 from Wednesday’s close, according to the average of 19 forecasts in a Bloomberg survey. Equity funds once more led inflows among asset classes in the week through Jan. 12, as investors reduced cash holdings, according to BofA and EPFR Global data.
Emerging-market stocks and currencies headed for the biggest weekly gains since early September as their outlook was boosted by the U.S. dollar’s worst start to a year since 2019. Russia’s ruble and South Africa’s rand outperformed peers.
Oil headed for a fourth weekly advance, the longest streak since October, amid signs the market is tightening.
Here are some key events coming up:
- Wells Fargo, Citigroup and JPMorgan are due to report earnings on Friday.
- U.S. business inventories, industrial production, University of Michigan consumer sentiment, retail sales on Friday.
- New York Fed President John Williams speaks Friday.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.1% as of 6:33 a.m. New York time
- Futures on the Nasdaq 100 were little changed
- Futures on the Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 fell 0.6%
- The MSCI World index fell 0.9%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1452
- The British pound rose 0.1% to $1.3725
- The Japanese yen rose 0.2% to 113.97 per dollar
Bonds
- The yield on 10-year Treasuries advanced four basis points to 1.75%
- Germany’s 10-year yield advanced three basis points to -0.06%
- Britain’s 10-year yield advanced four basis points to 1.14%
Commodities
- West Texas Intermediate crude rose 1.3% to $83.19 a barrel
- Gold futures were little changed
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