Friday July 29th

U.S. stock index futures climbed 0.7%, while Nasdaq 100 futures added 1%. Futures tied to the Dow Jones Industrial Average gained 66 points, or 0.2%. Wall Street was set to post strong weekly gains. The Dow is now up nearly 2% for the week, while the S&P 500 the Nasdaq Composite are up 2.8%. The major averages were also on pace for their best month of 2022. The Dow is on track for a more than 5% gain for July, while the S&P 500 could finish higher by 7.5%. The Nasdaq Composite, while still in bear market territory, is up more than 10% for the month.

That performance is a stark contrast from the previous six months when stocks tumbled to their June bear market levels. The market reversed as investors’ fears about the aggressive pacing of the Federal Reserve’s interest rate increases started to wane and the idea that inflation has perhaps peaked began to settle in.

Still, some have remained worried about inflation levels with Russia’s ongoing war on Ukraine and the possibility that markets could turn lower again. On Thursday the Bureau of Economic Analysis reported that the personal consumption expenditures price index, an inflation indicator closely watched by the Fed, hit its highest level since January 1982.

Nevertheless, futures Thursday were decidedly higher, supported by gains from two of the market’s biggest stocks. Amazon shares popped 12% after the e-commerce giant reported stronger-than-expected sales for the previous quarter, while Apple climbed 2.6% after posting better-than-expected iPhone revenue. Chevron and Exxon Mobil also posted better-than-expected results for the previous quarter, sending their shares higher. However, the latest batch of corporate results has been mixed. Shares of Roku sank more than 20% after the company missed estimates and warned of a slowdown in advertising. Chipmaker Intel dropped 7% after its quarterly results fell short of expectations. These moves come after a three-quarters of a percentage point hike from the Federal Reserve on Wednesday and a negative GDP reading on Thursday. “The market is taking on a hope that slowing economic growth is going to result in a more dovish Fed moving forward, even if it’s a little further out. So it would make sense to me that weaker rates expectations moving forward would result in a little buoyancy in the equity markets,” said Lauren Goodwin, economist and portfolio strategist of New York Life Investments. However, Goodwin cautioned that the unusual economic environment and the long period before the next Fed meeting make it difficult to predict the central bank’s path from here. Investors will get updated looks at a key inflation reading and second-quarter employment costs on Friday, which could be key data points for the Fed as it considers its next move. Hong Kong’s Hang Seng index fell more than 2% on Friday as tech stocks came under pressure. The benchmark index slipped 2.64% in the final hour of trade, while the Hang Seng Tech index dropped 5.41%. In mainland China, the Shanghai Composite was 0.89% lower at 3,253.24 and the Shenzhen Component dropped 1.3% to 12,266.92. Oil prices rose in European trading on Friday as attention turned to next week’s OPEC+ meeting and expectations that it will dash U.S. hopes for a supply boost. Brent crude futures for September settlement, due to expire on Friday, gained $2.44 to trade at $109.58 a barrel. The more active October contract was up $2.30 at $104.13. U.S. West Texas Intermediate (WTI) crude futures ended the day at $98.59 for a gain of 2.3%. Both contracts are set for a second monthly loss, however, down 4.6% and 6.8%, respectively. Gold prices rose on Friday and were on course for their best week in nearly five months, as the U.S. dollar extended its retreat in the wake of worrying U.S. economic data. Spot gold rose 0.2% to $1,759.79 per ounce. It has gained about 2% so far this week, the most since early-March. U.S. gold futures rose 0.4% to $1,757.80.