Market Snapshot: Stock market set to move higher with trade talks, yields in the spotlight

U.S. stock-index futures indicated a higher start for Wall Street on Friday, with investors shaking off some concerns about trade talks between the U.S. and China, as well as persistently higher bond yields.

What are markets doing?

Dow Jones Industrial Average futures YMM8, +0.22%  rose 72 points, or 0.3%, to 24,776, while S&P 500 futures SM8, +12.12%  rose 4.8 points, or 0.2%, to 2,723.50. Nasdaq-100 futures NQM8, +0.00% climbed 14.75 points, or 0.2%, to 6,920.50.

On Thursday, the Dow DJIA, -0.22% slipped 54.95 points, or 0.2%, to 24,713.98, the S&P 500 index SPX, -0.09% shed less than 0.1% to 2,720.13, and the technology-heavy Nasdaq Composite Index COMP, -0.21% gave up 0.2% to 7,382.47.

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Meanwhile, the small-cap benchmark Russell 2000 index RUT, +0.55%  rose 0.6% on the day, scoring its second straight closing record at 1,625.29.

As of Thursday’s close, the Dow was set to drop 0.5% for the week, with the S&P 500 and Nasdaq looking at losses of 0.3% each.

What’s driving the market?

Trade talks between the U.S. and China in Washington will likely command attention. A China official on Friday denied an offer had been made to cut its trade surplus with the U.S. by $200 billion. A variety of news outlets reported that an offer had been made on Thursday. That comes amid doubts over the success of those talks, given that President Donald Trump said Thursday that Beijing had become too “spoiled” and he had lowered his expectations for negotiations.

Meanwhile, lawmakers in both houses of Congress were poised to push forward a bill that would give the U.S. greater powers to block deals between U.S. and Chinese companies that could pose a risk to national security.

Higher yields also remain in focus, with the yield on the 10-year Treasury TMUBMUSD10Y, -0.47% note hovering at a nearly 7-year peak above 3.1%. The psychologically important level of 3% comes with the idea for some that equities could become less attractive. The yield on the 30-year TMUBMUSD30Y, -0.27%  U.S. Treasury bond has hit the highest level since June 2015.

The economic calendar is largely empty outside of first-quarter data on advance services due at 10 a.m. Eastern Time.

Cleveland Fed President Loretta Mester was speaking at a European Central Bank conference on macroprudential and monetary policy on Friday. She said the Fed should publish a financial stability report to highlight the central bank’s assessment of vulnerabilities in the financial system.

Fed Gov. Lael Brainard is scheduled to speak at the Association for Neighborhood and Housing Development’s eighth annual conference at 9:15 a.m. Eastern.

What are strategists saying?

The last session of the week is shaping up to be a positive one, noted Konstantinos Anthis, head of research at ADS Securities, in a note to clients.

“However, we should highlight that with yields still above 3% and concerns for a potential breakdown of U.S.-China negotiations the risk for equities is to the downside. The combination of expensive financing and a dampening of risk appetite lurks around the corner so caution is advised and the focus for equity traders should be on the short-term,” Anthis added.

What stocks are in focus?

1786, +0.47% 1786, +0.47% Deere & Co. DE, -0.37%  fell 1% after an earnings miss and Campbell Soup Co. CPB, -0.66%  are due to report ahead of the open.

Shares of Applied Materials Inc. AMAT, -2.19%  slid 5% in premarket trading after the chip maker on a weak sales outlook.

Nordstrom Inc. JWN, +0.45%  tumbled nearly 7% after the retailer reported weaker same-store sales growth.

Carver Bancorp Inc. CARV, +197.30%  rose 18% after shooting 190% higher late Thursday. Thus far there is no explanation for the rise and the company said Thursday that it hadn’t taken action or was aware of any information that would have pushed up those shares.

AmTrust Financial Services Inc. AFSI, +0.60%  shares could be active after activist investor Carl Icahn contested an attempt by the company’s owners to take it private.

Shares of drugmakers Amgen Inc. AMGN, +0.49%  and Novartis AG NVS, -0.58% NOVN, -0.23%  could be active after jointly announcing FDA approval of a first-of-its kind treatment for migraines.

Shares of Campbell Soup Co. CPB, -0.66%  might be in focus after the company said Chief Executive Denise Morrison will retire, effective Friday. Board member Keith McLoughlian will serve as interim CEO. Campbell Soup shares are down 18.5% in the year to date.

What are other markets doing?

Asian markets finished mixed, with most indexes modestly lower for the week. European stocks SXXP, -0.15% SXXP, -0.15% drifted lower as investor worries over Italian politics persisted.

Gold futures GCM8, -0.14% slipped 0.3% to $1,286, while the ICE U.S. Dollar Index DXY, +0.10% was rising. Oil futures CLM8, +0.17% were mostly flat at $71.54 a barrel, with Brent LCON8, +0.66% just under $80 a barrel.

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