US stock futures climb after China rate cut, as Dow faces worst weekly losing streak in history

US stock index futures pointed to a bounce for Wall Street on Friday, with sentiment getting a lift from a cut in one of China’s key lending rates, but investors are still facing yet another weekly loss.

How are stock-index futures trading?
  • S&P 500 futures ES00
    climbed 37 points, or nearly 1%, to 3,935.25

  • Dow Jones Industrial Average futures YM00
    jumped 246 points, or 0.7%, to 31,444

  • Nasdaq 100 futures NQ00
    climbed 151 points, or 1.2%, to 12,030

On Thursday, the Dow industrials and S&P 500 booked their lowest closes since March 2021, according to Dow Jones Market Data. The Dow DJIA
fell 236.94 points, or 0.8%, ending at 31,253.13, after a 300 point gain at one point. The S&P 500 SPX
fell 0.6% to 3,900.79, and the Nasdaq Composite COMP
slipped 0.3% to 11.388.50.

Wednesday’s dramatic selloff marked the worst day for the Dow and S&P 500 since June 2020.

What’s driving markets?

Wall Street stock index futures took their cue from a strong Asian session, where the Hong Kong Hang Seng HK:HSI
rally 2.9% and the China CSI 300 index XX:000300
gained 1.9%.

The People’s Bank of China on Friday cut in its rate on five-year loans, aimed at shoring up weak housing sales by cutting mortgage costs. The country has been battling COVID outbreaks, with lockdowns in industrial hubs such as Shanghai blamed for weak factory and consumer activity data in April.

“The news out of China and the successful test of the S&P 500 holding support is poised to pull the index out of the danger zone. We reiterate; for now, we think the market has placed in a bottom,” Peter Cardillo, chief market economist at Spartan Capital, told clients in a note.

The S&P 500 finished a step closer to bear-market territory on Thursday as the Russia-Ukraine war, a China slowdown, high inflation and rising interest rates have sparked concerns over corporate profits and economic growth.

Read: Selloff puts S&P 500 on bear market’s doorstep. If history is a guide, there’s more pain ahead.

Down 3% or more each, major US stock indexes are likely facing yet another week of losses. The Dow industrials is set for its eighth-straight loss, which mark its longest streak in history, according to FactSet.

The S&P 500 and Nasdaq are poised for their worst losing streaks since June 2011 and November, 2012, respectively. Losses have come amid concerns about whether soaring inflation can be brought under control by the Federal Reserve without derailing the economy.

Major retailers this week, such as Walmart WMT
and Target TGT
reported disappointing profits, against a backdrop of rising expenses and inflation.

Read: Swiss running shoe company On Holding runs with premium pricing despite inflation

The US data calendar is empty for Friday, but next week will bring another round of inflation data, personal consumption expenditures excluding food and energy.

Which companies are in focus
  • Shares of Ross Stores Inc.
    ROST
    slumped 27% after the retailer became the latest to report disappointing quarterly results and trim its outlook, blaming higher inflation and rising freight and wage costs.

  • Deere & Co.
    ALSO
    shares slipped 2.4% after the agriculture, construction and forestry equipment maker reported better-than-expected fiscal second-quarter profit and revenue.

  • Applied Materials Inc.
    AMAT
    stock slipped 1.3% after the chip-equipment maker reported a miss on profit, revenue and forecast amid continued supply chain woes.

How are other assets trading?
  • The yield on the 10-year Treasury note BX:TMUBMUSD10Y
    rose 1 basis point to 2.861%. Yields and debt prices move opposite each other.

  • The ICE US Dollar Index DXY
    rose 0.1%

  • Bitcoin BTCUSD
    was up 0.2% at $30,079.

  • Oil futures rose, with the US benchmark CL
    rose 0.1% to $109.97 a barrel. Gold futures GC00
    was modestly higher at $1,842.50 an ounce.

  • The Stoxx Europe 600 XX:SXXP
    rose 1.5%, while London’s FTSE 100 UK:UKX
    rose 1.8%.

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