Futures Pointing To Initial Pullback On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly lower open on Friday, with stocks likely to move back to the downside after moving sharply higher over the two previous sessions.

Traders may look to cash in on the strong upward move seen over the past two days, which largely offset the steep drop seen on Tuesday.

The rebound largely reflected a positive reaction to President Donald Trump ruling out the use of military force to acquire Greenland and backing off tariff threats against Europe over his efforts to take control of the Arctic territory.

However, Trump has now apparently shifted his attention back to Iran, telling reporters aboard Air Force One on Thursday that a U.S. "armada" is heading toward the Middle East.

"We're watching Iran," Trump said. "You know we have a lot of ships going in that direction just in case. We have a big flotilla going in that direction and we'll see what happens."

Trump had previously backed down from threats of military strikes against Iran over its crackdown on widespread protests.

A slump by shares of Intel (INTC) is also likely weigh on Wall Street, with the semiconductor giant plunging by nearly 13 percent in pre-market trading.

Intel is under pressure after the company reported better than expected fourth quarter earnings but provided disappointing guidance for the current quarter.

Stocks moved mostly higher over the course of the trading day on Thursday, adding to the strong gains posted during Wednesday's session. The major averages further offset the steep losses posted on Tuesday, with the Dow turning positive for the week.

The major averages ended the day well off their highs of the session but still firmly positive. The Dow climbed 306.78 points or 0.6 percent to 49,384.01, the Nasdaq advanced 211.20 points or 0.9 percent to 23,436.02 and the S&P 500 rose 37.73 points or 0.6 percent to 6,913.35.

The extended rebound on Wall Street came as stocks continued to benefit from easing tensions over President Donald Trump's efforts to take control of Greenland.

Trump ruled out the use of military force to acquire Greenland during a speech on Wednesday and later said he had reached the "framework" of a deal on the arctic territory.

As a result of the "framework" of a deal reached with NATO Secretary General Mark Rutte, Trump pulled back from threats to impose sanctions on European countries that opposed his plans.

Some analysts see the strength on Wall Street as a return of the "TACO trade," meaning "Trump Always Chickens Out," as the president is often seen as backing down after scaring the markets with threats of new tariffs.

"There are a lot of similarities with the Liberation Day market wobble in April 2025 and now," said Russ Mould, investment director at AJ Bell. "In both situations, Trump took an aggressive stance and then backed down after financial markets wobbled."

He added, "The US president has a keen eye on what happens with bonds and stocks, and the last thing he wants is to be accused of destroying people's wealth."

In U.S. economic news, the Labor Department released a report on Thursday showing a slight uptick in first-time claims for U.S. unemployment benefits in the week ended January 17th.

The report said initial jobless claims crept up to 200,000, an increase of 1,000 from the previous week's revised level of 199,000.

Economists had expected jobless claims to rise to 205,000 from the 198,000 originally reported for the previous month.

A separate report released by the Commerce Department showed consumer prices increased in line with economist estimates in the month of November.

Gold stocks saw substantial strength on the day amid a sharp increase by the price of the precious metal, with the NYSE Arca Gold Bugs Index spiking by 4.4 percent to a record closing high.

Significant strength was also visible among telecom stocks, as reflected by the 2.1 percent jump by the NYSE Arca North American Telecom Index. The index also reached a record closing high.

Software, networking and biotechnology stocks also saw notable strength, contributing to the advance by the tech-heavy Nasdaq, while real estate and housing stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are surging $1.17 to $60.53 a barrel after tumbling $1.26 to $59.36 a barrel on Thursday. Meanwhile, after jumping $75.90 to $4,913.40 ounce in the previous session, gold futures are climbing $19.50 to $4,932.90 an ounce.

On the currency front, the U.S. dollar is trading at 158.16 yen versus the 158.40 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1739 compared to yesterday's $1.1754.

Asia

Asian stocks ended mostly higher on Friday after U.S. stocks rose for a second consecutive session overnight on easing geopolitical and trade tensions between the United States and Europe.

Lingering uncertainty about U.S. policy weighed on the dollar, helping lift gold prices to a record high above $4,950 an ounce.

Oil edged up as U.S. President Trump's comments about U.S. naval movements toward Iran reignited concerns over potential conflict escalation and supply disruptions in global markets.

China's Shanghai Composite Index rose 0.3 percent to 4,136.16 after consumer electronics giant Xiaomi announced a stock buyback program worth up to HK$2.5 billion ($321 million).

Hong Kong's Hang Seng Index gained 0.5 percent to close at 26,749.51, extending gains for a third consecutive session following Trump's announcement of a framework deal with NATO on a future Greenland deal.

Japanese markets eked out modest gains, while the yen lagged after the Bank of Japan held rates on hold but signaled that it was likely to continue raising interest rates in 2026.

Earlier in the day, data showed that Japan's headline inflation rate slowed sharply to 2.1 percent in December, its lowest level since March 2022, on the back of government subsidies.

January PMI readings delivered an upbeat signal, indicating a broadening recovery across the Japanese private sector.

The Nikkei 225 Index edged up by 0.3 percent to 53,846.87, while the broader Topix Index settled 0.4 percent higher at 3,629.70.

Seoul stocks ended higher for a third day running, led by brokerage and technology stocks. The Kospi advanced 0.8 percent to 4,990.07, hitting a fresh peak after a choppy session.

Chipmaker Samsung Electronics ended marginally lower after Intel forecast quarterly revenue and profit below Wall Street estimates.

Australian markets rose modestly in cautious trade as stronger jobs and PMI data boosted expectations that an RBA interest rate hike could be coming sooner rather than later.

The benchmark S&P/ASX 200 Index inched up by 0.1 percent to 8,860.10, while the broader All Ordinaries Index closed up 0.2 percent at 9,189.90.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slid 0.8 percent to 13,448.24 after data showed inflation pushed above the Reserve Bank of New Zealand's 1-3 percent target band in the fourth quarter.

Europe

European stocks traded slightly lower on Friday and were on track to snap a five-week winning streak due to geopolitical and trade tensions linked to Greenland.

In economic news, flash survey results from S&P Global showed the euro area private sector logged steady growth in January as manufacturing output returned to growth, while the pace of expansion in services activity softened to a four-month low.

The HCOB flash composite output index registered 51.5 in January, unchanged from December. The score was forecast to rise marginally to 51.6.

The pan European Stoxx 600 Index is down 0.2 percent after surging 1 percent on Thursday.

The French CAC 40 Index is also down by 0.3 percent, although the German DAX Index is just above the unchanged line and the U.K.'s FTSE 100 Index is up by 0.1 percent.

French lender BNP Paribas has edged lower after reports it plans to eliminate about 1,200 jobs by the end of 2027.

British defense contractor Babcock International has also fallen after announcing CEO succession.

German chemical giant BASF has also moved to the downside after warning of weaker earnings.

Meanwhile, Swiss composite materials specialist Gurit Holding has soared after 2025 sales beat guidance.

Sweden's Ericsson has also surged. The telecom equipment maker beat quarterly earnings expectations and announced a SEK 15 billion share buyback.

U.S. Economic News

The University of Michigan is due to release its revised reading on consumer sentiment in the month of January at 10 am ET.

The consumer sentiment index for January is expected to be unrevised from the preliminary reading of 54.0, which was up from 52.9 in December.

Also at 10 am ET, the Conference Board is scheduled to release its report on leading economic indicators in the month of November.