Gold prices bounce off 3-week lows; demand likely longer term
Investing.com - U.S. stock futures edged higher Friday, with Wall Street on course to register a winning week on generally healthy earnings as well as optimism over likely trade deals ahead of the Trump administration’s August deadline. Crude prices have also pushed higher, while Intel offered up weak guidance as the chipmaker sought to drastically cut costs.
1. Trade agreements still in focus
Trade negotiations remain in the spotlight at the end of a week that has seen the U.S. sign new deals with Japan, Indonesia and the Philippines, adding to previously announced agreements with the U.K. and China.
A European Commission spokesman said on Thursday that a deal between the European Union and the U.S. on trade tariffs is "within reach", ahead of the August 1 deadline when U.S. President Donald Trump has threatened to impose a sweeping 30% levy on EU imports.
Such a deal is likely to result in a broad tariff of 15% applying to EU goods imported into the United States, Reuters reported, citing two diplomats.
Additionally, the U.S. is set to engage in fresh trade talks with China next week, with the Wall Street Journal reporting on Friday that President Donald Trump is seeking more economic concessions from Beijing.
The U.S. and China agreed in May and June to substantially lower their respective trade tariffs on each other, and signed a framework trade agreement.
But both sides are now attempting to clinch a bigger deal, with the U.S. still maintaining tariffs of between 30% to 50% on Chinese goods.
2. U.S. futures gain on solid earnings
U.S. stock futures edged higher Friday, with Wall Street on course of a winning week as investors celebrate a generally positive earnings season to date.
At 03:10 ET (07:10 GMT), the S&P 500 futures traded 45 points, or 0.1%, higher Nasdaq 100 futures gained 10 points, or 0.1%, and Dow futures rose 20 points, or 0.1%.
The main Wall Street indices are all on course to finish the week with gains, with the blue chip Dow Jones Industrial Average set for an almost 1% advance on the week, as is the tech-heavy NASDAQ Composite, while the S&P 500 has risen about 1.1% week to date.
Almost 83% of the 155 S&P 500 companies that have reported to date beat Wall Street’s expectations, helping both the latter two indices to fresh all-time intraday and closing highs on Thursday.
Recent trade deals between the U.S. and its trading partners have also helped push the market to new heights, and investors are now awaiting any further trade announcements before the Trump administration’s Aug. 1 tariff deadline.
There are more earnings to digest Friday, including from the likes of HCA Holdings (NYSE:HCA) and Charter Communications (NASDAQ:CHTR), while there will also be durable goods orders for June to study, ahead of next week’s Federal Reserve meeting.
3. Trump/Powell clash again, over costs
Trump and Federal Reserve Chairman Jerome Powell clashed once again on Thursday, this time over the cost of renovations of the central bank’s Washington headquarters.
The U.S. president visited Washington on Thursday and focused on construction costs, pointing out that the renovation budget had increased from $2.7 billion to approximately $3.1 billion - a new figure that Powell disputed.
However, Trump seems to have moved away from firing Powell, at least for now, anyway.
"To do so is a big move and I just don’t think it’s necessary," Trump told reporters after his visit to the Fed’s headquarters, rowing back from recent attacks which have been seen as a threat to the Fed’s independence.
That said, the president still expressed his desire for lower interest rates multiple times during the brief press conference, the main reason behind his criticism of Powell as the Federal Reserve has paused its rate-cutting cycle amid uncertainty over the impact on inflation from the Trump administration’s trade policies.
4. Intel slumps on weak guidance
Intel’s shares traded sharply lower premarket after the chipmaker said late Thursday that it expects steeper losses than Wall Street forecasts in the third quarter and announced plans to slash jobs.
The company plans to reduce headcount to 75,000 by the end of year, down 22% from the end of 2024, which will be through attrition and "other means".
Additionally, as part of an effort to improve capital efficiency, and cut down costs, Intel (NASDAQ:INTC) said it has ditched plans to build projects in Germany and Poland.
The company also said it would slow the pace of construction of its chip factory in Ohio "to ensure spending is aligned with market demand."
Investors seem to be concerned that the company appears more focused on cost cutting than restoring its technological edge in a very competitive sector.
5. Crude gains on trade optimism
Oil prices rose Friday, adding to the previous session’s sharp gains, supported by hopes of more U.S. trade deals ahead of President Donald Trump’s nearing deadline.
At 03:10 ET, Brent futures climbed 0.9% to $69.78 a barrel, and U.S. West Texas Intermediate crude futures rose 0.9% to $66.61 a barrel.
Both contracts jumped more than 1% on Thursday after data showed a sharp decline in U.S. crude inventories.
The crude markets have gained support from the prospect of more trade deals between the United States and trading partners ahead of an August 1 deadline for new tariffs on goods from an array of countries.
The United States and Japan unveiled a trade deal on Wednesday, and confidence in growing that the European Union was also moving toward a deal [see above].
Easing trade tensions boosts economic activity and cross-border commerce, which in turn drives up oil demand through increased transportation and industrial energy use.
(Reuters contributed reporting.)