Investing.com – Wall Street futures rebounded on Friday after the major indices hit two-month lows and the Dow entered negative territory for 2016 on fears that the Federal Reserve (Fed) was closer to tightening monetary policy than markets had expected.
The blue-chip Dow futures dropped 57 points, or 0.32%, by 10:56GMT, or 6:56AM ET, the S&P 500 futures fell 6 points, or 0.29%, while the tech-heavy Nasdaq 100 futures traded down 14 points, or 0.32%.
The increased chance of a rate hike in June rattled global markets on Thursday and pushed the dollar to seven-week highs as traders readjusted their outlook for U.S. monetary policy.
The odds for tightening in June shot up from 4% last week to 30% at Thursday’s market close, according to Fed fund futures data compiled by CME Group.
Both New York Fed president William Dudley and Richmond Fed chief Jeffrey Lacker echoed on Thursday the idea in the minutes from the last Fed meeting that June could be appropriate for a rate hike if economic data continued to show strength.
In this regard, market participants will be on watch for any monetary policy comments from Fed governor Daniel Tarullo at 13:00GMT, or 9:00AM ET, though he was scheduled to speak only about insurance company supervision and regulation.
In a light calendar day for macro data, the National Association of Realtors will release April existing home sales at 14:00GMT, or 10:00AM ET.
In company news, Yahoo (NASDAQ:YHOO) fell almost 3% in the pre-market on a Wall Street Journal report that bids for the internet portal’s core assets were expected to come in at $2 to $3 billion, lower than originally expected.
Applied Materials (NASDAQ:AMAT) had jumped more than 8% in the after hours market after reporting fiscal second quarter earnings and giving a better than expected guidance.
Ross Stores (NASDAQ:ROST) tumbled more than 6% after the close on Thursday after the gave a second quarter guidance that missed consensus.
Campbell Soup, Foot Locker, Deere and The Buckle were set to report earnings before the bell on Friday.
Oil prices traded flat on Friday but were on track for weekly gains of 5% as supply disruptions from turmoil in Nigeria, the lowest output in the U.S. since September 2014, the continuing saga of wildfires in Canadian oil sands and the crisis in Venezuela led to hopes of a reduction in brimming inventories.
Market participants looked ahead to the U.S. oil rig count from oilfield services provider Baker Hughes. Last Friday, the data showed an eighth straight week of declines in the number of rigs drilling for oil in the U.S.
U.S. crude futures inched up 0.04% to $47.74 by 10:52AM GMT, or 6:52AM ET, while Brent oil traded down 0.31% to $48.82.
The resurgent dollar, buoyed by a more hawkish Fed was hovering at a seven-week high, which also weighed on investor sentiment in commodities, as they become more expensive to buyers using other currencies.
Gold managed slight gains on Friday but was heading for a third straight week of losses, its longest stretch since last November. Gold is sensitive to moves in U.S. rates, as a rise would lift the opportunity cost of holding non-yielding assets such as bullion.