U.S. equity futures are little changed after the S&P 500’s latest record close, with investors awaiting retail sales for the next read on consumer resilience. S&P 500 futures were roughly flat to +0.1%, Nasdaq 100 futures were around flat to +0.1%, and Dow futures were down about 0.1% early Friday. The Russell 2000 gained 0.2% Thursday and also reached a record high, reinforcing the recent broadening beyond mega-cap growth.
U.S. equities advanced Thursday after softer producer-price data reduced near-term Fed tightening concerns. The S&P 500 gained 0.65%, the Nasdaq rose 0.81%, the Dow added 0.13% and the Russell 2000 increased 0.2%. The S&P 500 closed at another record, while trading volume remained relatively light at 16.1 billion shares, versus a 20-session average of 17.5 billion.
Sector performance showed continued leadership from rate-sensitive and growth exposures. Communication Services led at +1.56%, followed by Real Estate +1.34%, Technology +0.96% and Consumer Staples +0.89%. Financials gained 0.58%, Utilities rose 0.38%, Consumer Discretionary added 0.27%, and Health Care and Energy posted smaller gains. Materials fell 0.74% and was the weakest sector. Breadth was constructive, with advancers leading 1.82:1 on the NYSE and 1.53:1 on the Nasdaq.
Treasuries rallied modestly, with the 2-year yield falling 5 basis points to 4.15%, the 10-year declining 4 basis points to 4.65% and the 30-year dropping 3 basis points to 5.22%. The softer CPI and PPI combination has pushed the market-implied probability of a September Fed hold to roughly 68%, although long-term yields remain historically elevated.
The DXY slipped to 99.96, while the euro finished around $1.1530, sterling near $1.3488 and the dollar near ¥159.52. The yen strengthened modestly toward ¥159.2 Friday morning amid reports that the Bank of Japan could raise rates as early as September.
September WTI crude fell 2.59% Thursday to $81.11, while December gold declined 1.41% to $4,404.70. Crude is reversing higher this morning, with WTI around $82.81 and Brent near $88.50, after the U.S. threatened to maintain its naval blockade of Iran indefinitely as ceasefire talks stalled. Gold is near $4,346, still supported by lower Fed-hike expectations despite Friday’s modest pullback.
Thursday’s macro data reinforced the case for patience from the Fed. July PPI was unchanged month over month, versus expectations for a 0.2% increase, while year-over-year producer inflation slowed to 4.7% from 5.5%. Goods prices fell 0.7% and services rose 0.2%. Initial jobless claims increased to 209,000 from 200,000, while continuing claims declined to 1.777 million, consistent with a labor market characterized by limited hiring but still-low layoffs.
Friday’s main catalyst is July retail sales at 8:30 a.m. ET, with consensus looking for roughly a 0.1% monthly increase. The preliminary University of Michigan consumer-sentiment survey follows later in the morning, along with June business inventories at 10:00 a.m. Retail sales will help determine whether weak July payrolls are beginning to translate into softer household spending.
Sector Highlights
Sector performance showed continued leadership from rate-sensitive and growth exposures. Communication Services led at +1.56%, followed by Real Estate +1.34%, Technology +0.96% and Consumer Staples +0.89%. Financials gained 0.58%, Utilities rose 0.38%, Consumer Discretionary added 0.27%, and Health Care and Energy posted smaller gains. Materials fell 0.74% and was the weakest sector. Breadth was constructive, with advancers leading 1.82:1 on the NYSE and 1.53:1 on the Nasdaq.
Information Technology
- Applied Materials (AMAT -5% premarket) fell despite reporting record quarterly revenue of $9.12 billion, up 25% year over year, and forecasting fourth-quarter revenue of about $10.25 billion, above consensus. Investors focused on whether Applied can grow faster than competitors including ASML and Lam Research after the stock more than doubled this year.
- Workday (WDAY +18% Thursday) surged after Reuters reported that Silver Lake is in talks to acquire the cloud-software company in what could rank among the largest software buyouts ever. No agreement has been reached.
- SanDisk (SNDK +13.7%) rallied after projecting mid-to-high-teens annual revenue growth from fiscal 2028 through 2030, supported by sustained AI-driven storage demand. Micron (MU +4.2%) also advanced.
- Cisco Systems (CSCO -8.4%) remained a notable laggard after strong AI-networking demand and above-consensus revenue guidance failed to clear the market’s elevated expectations.
Communication Services
- Reddit (RDDT +12.6% premarket) jumped after S&P Dow Jones Indices announced it will join the S&P 500, replacing AvalonBay Communities. JPMorgan estimates index funds may need to buy about 16.7 million shares, nearly three times Reddit’s average daily volume since its IPO.
- Netflix (NFLX +5.4% Thursday) gained after Pershing Square’s Bill Ackman disclosed a new position in the streaming company.
Consumer Discretionary
- Tapestry (TPR -16.9%) tumbled after forecasting muted annual revenue growth as weakness at Kate Spade offset continued strength at Coach. Coach sales rose 14% while Kate Spade sales fell 7% on a constant-currency basis.
Real Estate
- AvalonBay Communities (AVB) will leave the S&P 500 as part of its planned all-stock merger with Equity Residential. The combined company, Vivmark Residential, is expected to remain in the index after the transaction closes.
