Market Snapshot: U.S. stocks set to end the week on a higher note, with trade talks, yields in the spotlight

U.S. stock futures were indicating a stronger start for Wall Street on Friday, with investors keeping a close eye on trade talks between the U.S. and China and on persistently higher bond yields.

What are markets doing?

Dow Jones Industrial Average futures YMM8, +0.13%  rose 41 points, or 0.2%, to 24,744, while S&P 500 futures SM8, +12.12%  rose 5.1 points, or 0.2%, to 2,723.50. Nasdaq-100 futures NQM8, +0.18%   climbed 18 points, or 0.3%, to 6,923.50.

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, up 0.6%.

With one session left to go for the week, the Dow is set to drop 0.5%, 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. China reportedly offered to cut its trade surplus with the U.S. by $200 billion, according to media reports on Thursday. That comes amid doubts over the success of those talks, given that U.S. President Donald Trump said Thursday that Beijing had become too “spoiled” and he had lowered his expectations for negotiations.

Meanwhile, lawmakers from both sides 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 will also stay in focus, with the yield on the 10-year Treasury TMUBMUSD10Y, -0.23%   note hovering at a near 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, -0.21%  U.S. Treasury bond has hit the highest level since July 2011.

The economic calendar is largely empty outside of first-quarter data on advance services due at 10 a.m. Eastern Time. Fed Governor Lael Brainard is scheduled to speak at the Association for Neighborhood and Housing Development’s 8th annual conference at 9:15 a.m. Eastern.

What were 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%  and Campbell Soup Co. CPB, -0.66%  are due to report ahead of the open.

AmTrust Financial Services Inc. AFSI, +0.60%  shares could be active over news activist investor Carl Icahn has 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, -0.33%  rose in after-hours trading after jointly announcing FDA approval of a first-of-its kind treatment for migraines.

What are other markets doing?

Asian markets finished mixed, with most indexes modestly lower for the week. European stocks SXXP, -0.32% SXXP, -0.32% opened mostly lower.

Gold futures GCM8, -0.14% drifted lower, while the ICE U.S. Dollar Index DXY, -0.02% was flat. Oil futures CLM8, +0.13% moved up to $71.63 a barrel, with Brent LCON8, +0.39% just under $80 a barrel.

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