The major U.S. index futures indicate a modestly lower opening on Friday, with stocks poised to decline following a mixed performance in the previous session.
Early trading on Wall Street might continue to be influenced by Nvidia (NVDA), as the AI chipmaker has dropped 1.6 percent in pre-market trading. Nvidia's earlier surge contributed to modest strength on Thursday, but a sharp decline by the company weighed down the Nasdaq and S&P 500 throughout the session.
However, overall trading activity may remain subdued as traders await additional clarity on the outlook for interest rates.
On Thursday, after an initial modest rise, major U.S. stock indexes diverged sharply. The Nasdaq and the S&P 500 moved into negative territory after early gains, while the narrower Dow experienced continued strength.
The Dow closed up 299.90 points or 0.8 percent at 39,134.76, marking a nearly one-month high. In contrast, the S&P 500 fell 13.86 points or 0.3 percent to 5,473.17, and the Nasdaq dropped 140.64 points or 0.8 percent to 17,721.59.
Shares of Nvidia slumped 3.5 percent after an earlier surge of 3.8 percent during the day.
Nvidia had increased by 3.5 percent on Tuesday, overtaking Microsoft (MSFT) as the world's most valuable public company.
The downturn in the Nasdaq and the S&P may also be attributed to profit-taking after the indexes hit new intraday highs, with the S&P 500 falling after rising above 5,500 for the first time.
On the other hand, the Dow's advance was driven by a 4.3 percent spike in Salesforce (CRM) shares, along with strong gains in Chevron (CVX) and IBM Corp. (IBM).
Traders were also digesting the latest U.S. economic data, including a Labor Department report showing a slight decrease in first-time claims for U.S. unemployment benefits for the week ended June 15th.
According to the Labor Department, initial jobless claims dipped to 238,000, a decrease of 5,000 from the previous week's revised level of 243,000. Economists had anticipated jobless claims to fall to 235,000 from the previously reported 242,000.
The upwardly revised figure for the previous week marked the highest level since claims reached 248,000 in the week ending August 12, 2003.
"Initial claims fell less than we anticipated for the week ending June 15, suggesting a moderation in nonfarm payrolls growth in June," said Ryan Sweet, Chief U.S. Economist at Oxford Economics. He added, "The risk of labor demand being too weak to prevent a rise in the unemployment rate could support interest rate cuts, as labor market imbalances are unlikely to significantly impact future inflation."
Simultaneously, a separate report from the Commerce Department showed an unexpected significant drop in new residential construction in May.
The Commerce Department reported that housing starts plunged by 5.5 percent to an annual rate of 1.277 million in May after a 4.1 percent surge to a revised rate of 1.352 million in April. Economists had expected housing starts to climb by 0.7 percent to an annual rate of 1.370 million from the initially reported 1.360 million.
Additionally, building permits fell by 3.8 percent to an annual rate of 1.386 million in May after a 3.0 percent decline to 1.440 million in April. Building permits, an indicator of future housing demand, were anticipated to increase by 0.7 percent to an annual rate of 1.450 million.
The downturn by Nvidia dragged semiconductor stocks sharply lower, causing the Philadelphia Semiconductor Index to drop by 2.7 percent. Significant weakness was also observed in computer hardware stocks, evidenced by the 1.1 percent decline in the NYSE Arca Computer Hardware Index.
Conversely, gold stocks saw a substantial upward movement, driving the NYSE Arca Gold Bugs Index up by 2.5 percent due to a significant rise in gold prices.
An increase in crude oil prices also led to considerable gains among oil producer stocks, resulting in a 1.6 percent rise in the NYSE Arca Oil Index.
Commodity and Currency Markets### Commodity Futures Update
Crude oil futures have edged up by $0.05, reaching $81.34 per barrel, following a $0.58 rise to $81.29 per barrel on Thursday. Concurrently, gold futures have increased by $8.40, bringing the price to $2,377.40 per ounce after a substantial jump of $22.10 to $2,369 per ounce in the previous session.
### Currency Market Overview
On the currency front, the U.S. dollar is trading at 158.96 yen, a slight increase from the 158.93 yen at the close of New York trading on Thursday. Against the euro, the dollar is now valued at $1.0690, down from $1.0702 the previous day.
### Asian Markets
Asian stocks declined on Friday as new economic data revealed weaknesses in the U.S. economy, and Treasury yields rose following hawkish comments from Federal Reserve officials.
- **China**: The Shanghai Composite Index fell by 0.2% to 2,998.14 in response to reports that Canada is considering new tariffs on Chinese-made electric vehicles, similar to those imposed by the U.S. and the European Union.
- **Hong Kong**: The Hang Seng Index dropped by 1.7% to 18,028.52, affected by the weakening yuan amid rising geopolitical tensions between China and the West.
- **Japan**: Japanese markets closed slightly lower. Government bond yields increased, and the dollar climbed to a new eight-week high above 159 yen, heightening concerns of potential intervention. Japan's top currency diplomat, Masato Kanda, indicated that authorities are prepared to take action against excessive volatility in the currency markets.
- **South Korea**: The Kospi Index declined by 0.8% to 2,784.26, ending a three-day winning streak due to profit-taking in tech and auto stocks. Samsung Electronics, SK Hynix, and Hyundai Motor all saw significant losses.
- **Australia**: The S&P/ASX 200 Index rose by 0.3% to 7,796, and the broader All Ordinaries Index closed up 0.4% at 8,039.90. Healthcare and energy stocks led the modest gains, even as June PMI data suggested a slowdown in business expansion.
- **New Zealand**: The S&P/NZX-50 Index fell by 0.8% to 11,682.39.
### European Markets
European stocks mostly fell as investors reacted to weak business activity data from the region.
- The Eurozone's composite Purchasing Managers' Index, as per HCOB/S&P Global, fell to 50.8 in June from May's 52.2, indicating a slowdown in business recovery.
- In the U.K., private sector growth reached a seven-month low in June due to a slowdown in service sector growth, partially offsetting a stronger manufacturing performance. The S&P Global Composite PMI dipped to 51.70 from 53.0 in May.
- On a positive note, the U.K. saw a 2.9% monthly increase in retail sales volume in May, recovering from a 1.8% decrease in April. The consumer sentiment index also improved to -14 from -17 in the same period.
By market close, the U.K.’s FTSE 100 Index had declined by 0.7%, while the German DAX Index and the French CAC 40 Index were both down by 0.6%.
In corporate news, STMicroelectronics N.V. saw its shares decline after announcing two share repurchase programs worth up to $1.100 billion over three years. Britvic shares surged in response to rejecting Carlsberg Group's second acquisition proposal at 1,250 pence per share, causing Carlsberg shares to drop by 3.6% in Copenhagen. Zealand Pharma shares soared after reporting a promising early-stage study showing significant weight reduction from its high-dose drug over 16 weeks.
### U.S. Economic Reports
The National Association of Realtors is expected to release its May report on existing home sales at 10 am ET. Projections suggest a decrease to an annual rate of 4.10 million from 4.14 million in April.
At the same time, the Conference Board will publish its leading economic indicators report for May. The leading economic index is anticipated to dip by 0.3% after a 0.6% decline in April.
