Stock futures edged higher on Friday as investors turned their attention to big bank earnings after the major indexes staged a historic reversal rally.
Futures linked to the Dow Jones Industrial Average rose 148 points, or 0.49%. S&P 500 futures rose 0.37% and Nasdaq 100 futures rose 0.18%.
JPMorgan and Wells Fargo rose after earnings beat estimates, with both stocks trading higher in premarket trading. Morgan Stanley and Citigroup are also scheduled to report before the open.
Dow member UnitedHealth also reported quarterly results on Friday, with earnings and revenue topping expectations. UnitedHealth shares rose 0.8%.
The reports came a day after a massive market rally. The Dow closed up 827 points on Thursday after falling more than 500 points from an intraday low. The S&P 500 rose 2.6%, breaking a six-day losing streak, while the Nasdaq Composite rose 2.2%.
The moves follow the release of the consumer price index, a key U.S. inflation reading for September, which came in above expectations. Initially, this weighed on the market as investors braced for the Fed to continue its aggressive rate hike program. Later, however, they shrugged off those concerns.
“The best excuse for today’s rally is ‘sell the news,’ coupled with highly negative sentiment/positioning,” said Ross Mayfield, an investment strategist at Baird. “The market has fallen for six straight days, slightly reducing the risk of the report, And the September CPI probably won’t change the Fed’s near-term path (which is already pretty hawkish).”
Still, persistent inflation remains a concern for the Fed and investors over central bank tightening.
“The turnaround is a welcome respite for investors, but the market still needs a clearer picture of the extent of tightening ahead,” said Brian Levitt, Invesco global market strategist. “The focus remains on the pace of inflation and the The underlying strength of the industry market. When the market believes that the Fed is about to pause its tightening policy, the market may start to rebound.”
There’s more economic data coming this week. Retail sales for September will be released at 8:30 a.m. ET. Later in the morning, investors looked ahead to the latest consumer confidence data from the University of Michigan.