Dow Futures Up 280 Pts; Chinese Cut, Palo Alto Earnings in Focus

© Reuters.

By Peter Nurse

Investing.com -- U.S. stocks are seen opening higher Friday, attempting to end a turbulent week on a positive note with monetary policy easing by China helping global sentiment.

At 7 AM ET (1100 GMT), the Dow Futures contract was up 280 points, or 0.9%, S&P 500 Futures traded 42 points, or 1.1%, higher and Nasdaq 100 Futures climbed 175 points, or 1.5%.

The main equity indices on Wall Street have been under pressure this week as weak quarterly numbers from the likes of Target (NYSE:TGT) and Walmart (NYSE:WMT) pointed to consumers easing back on discretionary spending in the face of rising prices for food and fuel.

The blue-chip Dow Jones Industrial Average is down 2.9% so far this week, while the tech-heavy Nasdaq Composite and the broad-based S&P 500 have both dropped over 3%. The S&P is on course to end a week below 4,000 points for the first time since March 2021, standing more than 19% below its all-time high, within touching distance of entering bear market territory.

Market sentiment was boosted earlier Friday by the news that China’s central bank cut its five-year loan prime rate by a more-than-expected 15 basis points, attempting to stimulate the world’s second largest economy and a major trading partner.

That said, it’s debatable how long this positive tone will last, with Ross Stores (NASDAQ:ROST) becoming the latest retailer to report disappointing quarterly earnings after the close Thursday. Its stock traded more than 27% lower premarket.

By contrast, Palo Alto Networks (NASDAQ:PANW) stock rose sharply premarket after the cybersecurity company raised its annual guidance after reporting better-than-expected fiscal third quarter results.

Agricultural equipment maker Deere & Company (NYSE:DE) and athletic apparel retailer Foot Locker (NYSE:FL) are among the companies scheduled to report numbers later Friday.

The economic data slate is largely empty today, and attention will soon turn to the June Federal Reserve meeting. Officials from the central bank, including Chair Jerome Powell, have indicated in recent days that more half-point increases to its benchmark interest rate would be appropriate to fight inflation.

Oil prices edged higher Friday as investors attempted to balance concerns about weaker economic growth with expectations of a demand rebound in China as the world's top crude importer eased some COVID-19 lockdowns.

The number of U.S. oil rigs by Baker Hughes and CFTC positioning data are scheduled for release later in the session, rounding off the week.

By 7 AM ET, U.S. crude futures traded 0.1% higher at $109.95 a barrel, while the Brent contract rose 0.4% to $112.49.

Additionally, gold futures rose 0.1% to $1,843.40/oz, while EUR/USD traded 0.1% lower at 1.0579.