Stock futures are flat to positive on Friday as investors continue to pay attention to corporate earnings. Earnings season is on and all eyes will be on the quarterly earnings reports from major companies.
Wall Street closed firm the previous day, with the S&P 500 and Nasdaq hitting record highs amid solid retail sales and jobless claims drop.
Premarket trading saw a 2.5% increase in 3M shares following the company’s release of better-than-expected profits and an upgrade to its full-year outlook. Results from Charles Schwab and American Express are also expected to be released before the opening bell. In the meantime, Netflix’s stock fell 1.9% even though the firm exceeded forecasts for sales and earnings per share and increased its revenue projection for 2025.
Stocks rose on Thursday due to a surge in quarterly earnings releases from major corporations and higher-than-expected retail sales figures. The S&P 500, the Nasdaq Composite and Dow Jones Industrial Average are near record highs.
Meanwhile, Trump’s feud with Federal Reserve Chair Powell has sparked speculation, with reports suggesting Trump is set to fire him. However, Trump denied any such plans, but criticized Powell for not cutting interest rates this year and handling an expensive renovation at the Fed’s headquarters.
Powell has repeatedly said that the Fed will take rate cut decisions based entirely on the incoming data and remains wary of tariffs’ impact on the economy.
Any signs of weakness in the economy may also force Powell to cut rates. However, a Census Bureau report indicates a 0.6% increase in retail sales in June, driven by increased spending on automobiles, building materials, and clothing. This data, along with higher-than-expected inflation, suggests the economy’s resilience but may further decrease the Fed’s intention to cut interest rates.
Meanwhile, conflicting signals are emerging among the Fed officials. San Francisco Fed President Mary Daly expects two rate cuts this year, while Fed Governor Adriana Kugler suggests holding rates steady due to tariff-driven inflation.
The latest on Trump tariffs is that the President has sent letters to over 20 trade partners, setting new baseline tariffs of 20%–40%.
Inflation in June increased by 2.7% year-on-year, exceeding the Federal Reserve’s 2% annual goal. This could hinder the Fed’s ability to cut its federal funds rate, which is designed to stifle inflation and slow the economy.
Inflation has slowed investors’ anticipation of the Federal Reserve lowering its key interest rate during the next FOMC meeting on July 29-30. The next significant market mover could be the August 1 deadline set by Trump for imposing tariffs on other countries.