U.S. Stocks May See Further Upside In Early Trading

Stocks are likely to move to the upside in early trading on Friday, extending the advance seen over the course of the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.3 percent.

The markets may continue to benefit from renewed optimism about the outlook for interest rates, which has helped drive the Dow to a seven-day winning streak.

Recent data has pointed to some softness in the U.S. labor market, increasing investor confidence the Federal Reserve will lower interest rates in the coming months.

While the Fed is still widely expected to leave interest rates unchanged in June, the chances rates will be lower by September have reached 85.4 percent, according to CME Group’s FedWatch Tool.

However, early trading activity may be somewhat subdued ahead of the release of the University of Michigan’s preliminary reading on consumer sentiment in the month of May.

The consumer sentiment index is expected to dip to 76.0 in May after falling to 77.2 in April, although traders may pay closer attention to the readings on inflation expectations.

Among individual stocks, shares of Novavax (NVAX) are skyrocketing in pre-market trading after the biotechnology company entered into a co-exclusive licensing agreement with Sanofi (SNY).

The terms of the agreement include a co-exclusive license to co-commercialize Novavax’s current stand-alone adjuvanted Covid-19 vaccine worldwide and a sole license to Novavax’s adjuvanted Covid-19 vaccine for use in combination with Sanofi’s flu vaccines.

Solar energy company Array Technologies (ARRY) is also seeing substantial pre-market strength after reporting an unexpected first quarter profit on better than expected revenues.

On the other hand, shares of Akamai Technologies (AKAM) are likely to come under pressure after the cloud company provided disappointing second quarter guidance.

Following the lackluster performance seen over the two previous sessions, stocks moved mostly higher during trading on Thursday. The Dow extended its winning streak to seven sessions, once again reaching its best closing level in over a month.

The major averages ended the day just off their highs of the session. The Dow jumped 331.37 points or 0.9 percent to 39,387.76, the S&P 500 climbed 26.41 points or 0.5 percent to 5,214.08 and the Nasdaq rose 43.51 points or 0.3 percent to 16,346.26.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index advanced by 0.4 percent, while Hong Kong’s Hang Seng Index surged by 2.3 percent.

The major European markets have also moved to the upside on the day. While the U.K.’s FTSE 100 Index has climbed by 0.8 percent, the French CAC 40 Index and the German DAX Index are both up by 0.7 percent.

In commodities trading, crude oil futures are climbing $0.40 to $79.66 a barrel after rising $0.27 to $79.26 a barrel on Thursday. Meanwhile, after jumping $18 to $2,340.30 an ounce in the previous session, gold futures are surging $34.30 to $2,374.60 an ounce.

On the currency front, the U.S. dollar is trading at 155.82 yen versus the 155.48 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0771 compared to yesterday’s $1.0782.