US Stocks Set For A Volatile Start: Analyst Dismisses Chances Of 20%+ S&P 500 Gain For Third Year In A Row, But Says 'Investors Should Be Optimistic'

U.S. stock futures traded close to the flatline on Friday after Tuesday’s rally. Futures of all four benchmark indices were slightly lower while fluctuating between gains and losses.

Investors shrugged off President Donald Trump‘s latest tariff announcement. Despite Trump’s call for “fair and reciprocal” tariffs on all U.S. trading partners, the orders he signed on Thursday don’t call for immediate implementation of the tariffs. The tariffs could take effect as early as April, giving countries time to negotiate.

The 10-year Treasury yield stood at 4.54%, while the two-year yield was at 4.31%. According to the CME Group's FedWatch tool, there is a 97.5% chance that the Federal Reserve will keep interest rates unchanged for the March meeting.

Futures	Change (+/-)
Nasdaq 100	-0.01%
S&P 500	-0.06%
Dow Jones	-0.21%
Russell 2000	-0.04%

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ were higher in premarket trading on Friday. SPY fell 0.005% to $609.70, and QQQ was up 0.08% to $536.32, according to Benzinga Pro data.

Cues From The Last Session

Materials, consumer discretionary, information technology, and communication services sectors led US stocks higher Thursday.

The Dow added 0.77% or 343 points to end at 44,711.43, whereas the S&P 500 rose 1.04% to close at 6,115.07, which was near its record close.

The Nasdaq Composite gained 1.5% to close at 19,945.64 as Nvidia Corp. NVDA and Tesla Inc. TSLA rallied.

The gains came after Trump announced reciprocal tariffs with delayed implementation. Traders also overlooked the producer price index which indicated persistent wholesale inflation following a similar consumer inflation report. On an annual basis, January PPI rose 3.5%, well above the average 3.2% estimate and unchanged from a revised 3.5% in December.

Among individual stocks, Airbnb Inc. ABNB jumped 15% in after-hours on strong earnings, while Meta Platforms Inc. META extended its winning streak to 19 days, up 21.58% this year.

Index	Performance (+/-)	Value
Nasdaq Composite	1.50%	19,945.64
S&P 500	1.04%	6,115.07
Dow Jones	0.77%	44,711.43
Russell 2000	1.17%	2,282.18

Insights From Analysts

Comparing the victory of Super Bowl teams to the 20% plus gain in the S&P 500 index, Scott Wren, the senior global market strategist at Wells Fargo explained that there has not been a team that has won three consecutive Super Bowls in the long history of the National Football League.

However, in the long history of the S&P 500, only in the late 1990s the index has been able to produce three consecutive years of 20% plus total returns.

“Needless to say, whether you are looking at the stock market or professional football, being a big winner three years in a row is a tough row to hoe,” added Wren.

Highlighting Wells Fargo’s expectation of 6,600 on the S&P 500 he said, “Our 6,600 year-end target for the SPX would represent an approximate 12% gain from the Dec. 31, 2024, market close. Add in a bit for dividends and clearly we are not expecting another 20%-plus gain in the market this year. While still a strong year, our projection calls for only slightly better returns than the longer-term historical average.”

With a number of uncertainties that will potentially impact the market, which include tariffs, a potential rebound in inflation, a surge in bond yields, etc. Wells Fargo sees good economic growth and consumer spending this year as the unemployment rate stays below the long-term historical average.

“So do not be disappointed. We think investors should be optimistic,” he said.

The S&P 500 index was 4.20% higher on a year-to-date basis as of Thursday’s close. Ryan Detrick, the chief markets analyst at Carson Research highlighted a trend surrounding Valentine’s Day, celebrated on Feb. 14.

According to his data, out of the 32 times since 1951, whenever the index has been higher than 3% year-to-date, the whole year has seen positive returns.

The S&P 500 is about to be up more than 3% YTD on #ValentinesDay.

Why does this matter? Happened 32 times other and the rest of the year was higher 30 of them. That is nearly 94% of the time the rest of the year is green. pic.twitter.com/26vQWK6A7J
— Ryan Detrick, CMT (@RyanDetrick) February 13, 2025

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on Friday:

January’s import price index data and U.S. retail sales will be out by 8:30 a.m., ET.

January’s industrial production data and capacity utilization data will be released at 9:15 a.m., ET.

Business inventories data for December will be announced at 10:00 a.m., ET.

Dallas Fed President Lorie Logan will speak at 3:00 p.m., ET.

Stocks In Focus:

Essent Group Ltd. ESNT was up 5.16% in the premarket on Friday ahead of its earnings, which will be released before the opening bell. Analysts expect it to report quarterly earnings of $1.65 per share on revenue of $313.88 million.

Moderna Inc. MRNA jumped 3.07% as Wall Street expects it to report quarterly earnings of $2.68 per share on revenue of $942.84 million before the opening bell.

Portland General Electric Co. POR rose 0.024% ahead of its earnings, which will be released before the opening bell. Analysts expect it to report quarterly earnings of 35 cents per share on revenue of $663.32 million.

Airbnb Inc. ABNB was up 13.92% after beating analyst expectations after market hours on Thursday. Fourth quarter earnings were driven by accelerated growth in “nights and experiences” bookings and market share gains from traditional hotels.

Moleculin Biotech Inc. MBRX zoomed 60.63% as it will be exercising warrants to purchase 5,828,570 shares of common stock at a reduced price of $1.00 per share, expecting to generate gross proceeds of approximately $5.8 million.

Mynaric AG MYNA dropped 40.92% after receiving a delisting notification from Nasdaq dated Feb. 10, following the company’s initiation of restructuring proceedings under the German Corporate Stabilization and Restructuring Act.

Bellevue Life Sciences Acquisition Corp. BLAC declined 42.55% after it received approval for its business combination with OSR Holdings Co. The company has changed its name to OSR Holdings, Inc. and will trade on Nasdaq under symbols ‘OSRH’ and ‘OSRHW’ starting February 18, 2025.

Commodities, Gold And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 0.41% to hover around $71.58 per barrel.

The gold spot index was up by 0.26% to $2,936.06 per ounce. The Dollar Index was down 0.36% at 106.922 level.

Asian markets were mixed on Friday as India's S&P BSE Sensex and Japan's Nikkei 225 index declined. While Hong Kong's Hang Seng, China's CSI 300, Australia's ASX 200, and South Korea's Kospi index advanced. European markets were mixed in trade.

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