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U.S. stock futures slip after ‘crazy’ rally as key bank reports, retail sales data loom

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U.S. stock futures slipped Friday after what’s been called one of the craziest market days in history, showing the difficulty stocks will face in sustaining an advance while the Federal Reserve continues to tighten interest rates.

What’s happening
  • Futures on the Dow Jones Industrial Average
    YM00,
    +2.40%

    fell 43 points, or 0.1%, to 30048.

  • Futures on the S&P 500
    ES00,
    -0.52%

    dropped 6.75 points, or 0.2%, to 3675.

  • Futures on the Nasdaq 100
    NQ00,
    -0.79%

    decreased 38.25 points, or 0.4%, to 11046.

On Thursday, the Dow Jones Industrial Average
DJIA,
+2.83%

rose 828 points, or 2.83%, to 30039, the S&P 500
SPX,
+2.60%

increased 93 points, or 2.6%, to 3670, and the Nasdaq Composite
COMP,
+2.23%

gained 232 points, or 2.23%, to 10649.

The Dow’s 2.8% rise was the largest one-day gain since Nov. 9, 2020.

What’s driving markets

Rich Rieder, the chief investment officer for fixed income at BlackRock, called the gyrations one of the “craziest” in history, coming after data showing inflation running at a hotter-than-expected face. The S&P 500 had fallen for five consecutive sessions ahead of the CPI report.

“This snapback seems like the product of protective hedges being unloaded in the options market, which generated enough upside momentum to trigger a broader wave of short-covering,” said Marios Hadjikriacos, senior investment analyst at XM.

BlackRock’s Rieder advised investors to consider parking their money in short-term bonds, a point recently echoed by hedge-fund legend Ray Dalio.

Earnings season kicks off with a barrage of results from the banking sector, with JPMorgan Chase
JPM,
+5.56%
,
Wells Fargo
WFC,
+4.62%
,
Morgan Stanley
MS,
+3.55%

and Citigroup
C,
+5.17%

each scheduled to release results.

Friday will also see the release of key economic data, with September retail sales, and the October release of the University of Michigan consumer sentiment report, due for release. Fed Gov. Lisa Cook also is scheduled due to speak.

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