US Stocks Set To Open Lower On Friday As Investors Eye Cyclical Stocks: Trump's Treasury Pick In Focus, Expert Says Case For Fed Pause In December 'Getting Stronger'

U.S. stocks could open on a negative note on Friday after futures showed tentativeness on Friday. Investors turned their focus to cyclical stocks and themes, moving on from their focus on the Trump trade after the election results.

Futures of the three major indices were mixed, with the Nasdaq heading lower after AI giant Nvidia Corp. NVDA posted its highly-anticipated third-quarter results.

Futures	Change (+/-)
Nasdaq 100	-0.51%
S&P 500	-0.40%
Dow Jones	-0.29%
R2K	-0.08%

In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY edged lower by 0.34% to $591.68 and the Invesco QQQ ETF QQQ declined 0.39% to $503.03, according to Benzinga Pro data.

Cues From Last Session:

U.S. stocks ended Thursday in the green, with the Dow Jones surging by over 450 points, while the tech-heavy Nasdaq registered marginal gains.

Crude oil futures continued on their upward trajectory amid rising tensions between Russia and Ukraine.

Treasury yields eased marginally on mixed data and the declining probability of the Federal Open Market Committee (FOMC) cutting interest rates in December.

On the economic data front, U.S. existing home sales gained 3.5% from the previous month to an annualized rate of 3.96 million in October. The Philadelphia Fed Manufacturing Index fell to -5.5 in November from 10.3 in the previous month, and compared to market estimates of 8.

Initial jobless claims declined by 6,000 from the previous week to 213,000 in the week ending Nov. 16.

Most sectors on the S&P 500 closed on a positive note, with utilities, financials, and consumer staples stocks recording the biggest gains on Thursday.

However, consumer discretionary and communication services stocks bucked the overall market trend, closing the session lower.

Index	Performance (+/-)	Value
Nasdaq Composite	0.03%	18,972.42
S&P 500	0.53%	5,948.71
Dow Jones	1.06%	43,870.35
Russell 2000	1.65%	2,364.02

Insights From Analysts:

Powell's relatively hawkish tone has investors cautious in the markets. With the Trump trade losing steam, the focus is now on the President-elect's Treasury pick.

"In focus currently is President-elect Trump's pick for the influential post of US Treasury Secretary. Given the large US budget deficit, investors will probably want to see a safe pair of hands being chosen," ING analysts said in a note.

With the next rate cut now a coin toss, the U.S. dollar could see a correction. According to ING analyst Francesco Pesole, the dollar is "testing the limit" of its longs and traders should exercise caution for the time being.

"Powell seemed to put greater emphasis on the strength of the economy and how that allows the central bank to approach the upcoming policy decisions ‘carefully'."

CME Group's FedWatch tool reflected the fall in sentiment for another rate cut next month, with its probability declining to 59.6% from 72.2%.

“The case for a Fed pause in December is getting stronger and Fed officials are communicating that they are open to it going into the next meeting,” Kathy Jones, chief fixed income strategist at Schwab, said in a recent note.

“It will come down to employment and inflation data.”

See Also: How To Trade Futures

Upcoming Economic Data

Friday's major economic updates include:

• S&P U.S. Services and Manufacturing Purchasing Manager's Index will be released at 9:45 a.m. ET.
• Consumer sentiment data will be released at 10 a.m. ET.
• Fed Gov. Michelle Bowman will speak at 6:15 p.m. ET.

Stocks In Focus:

• The Gap Inc. GAP stock surged 15% in premarket trading after the retailer raised its annual target with a "strong" outlook for the holiday season.
• MicroStrategy Inc. MSTR stock surged over 2% in premarket trading on Friday as Bitcoin BTC/USD inched closer to the $100,000 mark. Robinhood Markets Inc. HOOD stock was also up over 0.5%.
• Reddit Inc. RDDT stock fell over 7% in premarket trading after the social media company amid Advance's stake sale announcement.
• Alphabet Inc. GOOG GOOGL stock fell over 4.7% on Thursday after the U.S. Department of Justice (DOJ) pushed forward with its demands for Google to divest the Chrome web browser.
• Investors are awaiting earnings results from Destination XL Group, Inc. DXLG and Global Blue Group Holding AG GB today.

Commodities, Bonds And Global Equity Markets:

Crude oil futures rose in the early New York session, surging by 0.61% to hover around $70.54 per barrel.

The 10-year Treasury note yield eased to 4.396%.

Most of the major Asian markets ended in the green on Friday, but European markets were mixed in early trading.

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