(Reuters) – Futures tracking the S&P 500 and the Nasdaq gained on Friday as investors looked forward to a producer inflation report for more cues on the timing of interest rate cuts, while shares of Applied Materials surged following an upbeat revenue forecast.
Wall Street’s main indexes have recovered after a setback earlier in the week following a hotter-than-expected consumer prices report. January’s slump in U.S. retail sales has revived optimism about rate cuts from the Federal Reserve in the first half of the year.
Traders’ bets are tilted towards June as the start of the Fed’s easing cycle, with 34.8% betting on a rate cut as soon as May, according to the CME Group’s FedWatch tool.
Producer prices data for January due at 8:30 a.m. ET (1330 GMT) will further shape the outlook for the Fed’s monetary policy path. The reading is expected to show prices inched up 0.1% after an unexpected dip last month.
“The inflation shock from the U.S. earlier in the week seems to have been shrugged off for now, even if it has pushed back expectations for when the Federal Reserve will start cutting interest rates,” AJ Bell investment director Russ Mould said in a note.
“So-called factory gate prices are significant because when manufacturers and other producers charge more for goods and services the higher costs usually feed through to the consumer,” Mould added, referring to the producer prices report.
Among big movers for the day, Applied Materials jumped 13.0% in premarket trade after the semiconductor equipment supplier forecast better-than-expected second-quarter revenue on strong demand for advanced chips used in artificial intelligence.
Most megacap stocks also advanced, with Nvidia gaining 1.7% after Oppenheimer hiked its price target on the AI chip designer’s stock by $200 to $850.
Robust corporate earnings and a surge of enthusiasm around the potential for artificial intelligence has fueled a rally on Wall Street this year, pushing the benchmark S&P 500 past the 5,000-point mark.
A total of 80.3% of companies in the S&P 500 that have reported quarterly earnings so far have beaten expectations compared to the annual 76% average, according to LSEG data on Thursday.
Later in the day, investors will also monitor a U.S. consumer sentiment survey for February from the University of Michigan.
At 5:30 a.m. ET, Dow e-minis were down 36 points, or 0.09%, S&P 500 e-minis were up 11 points, or 0.22%, and Nasdaq 100 e-minis were up 107.75 points, or 0.6%.
Shares of crypto exchange Coinbase Global jumped 11.2% on posting its first quarterly profit since 2021, helped by sturdy trading volumes due to a resurgence of interest in crypto.
DoorDash slipped 7.6% as the delivery firm forecast a quarterly profitability metric below Wall Street expectations, hurt by higher labor costs.
(Reporting by Amruta Khandekar; Editing by Maju Samuel)