U.S. Stocks May See Early Strength On Trade Deal Optimism

(RTTNews) - The major U.S. index futures are currently pointing to a higher open for the markets on Friday, with the S&P 500 and the Nasdaq poised to reach new record highs.

Optimism about new trade deals may contribute to early buying interest after President Donald Trump indicated the U.S. has signed an agreement with China.

A White House official later clarified that the U.S. and China have agreed to "an additional understanding of a framework to implement the Geneva agreement."

A spokesperson for China's Ministry of Commerce subsequently said the two sides have "confirmed the details of the framework."

The spokesperson said Washington would lift "restrictive measures," while Beijing would "review and approve" items under export controls.

Commerce Secretary Howard Lutnick also told Bloomberg the Trump administration expects to soon reach deals with ten major trading partners.

The futures remained in positive territory following the release of a closely watched Commerce Department report showing consumer prices in the U.S. crept up in line with expectations in the month of May.

After ending Wednesday's session little changed, stocks showed a strong move to the upside over the course of the trading day on Thursday. With the upward move, the Nasdaq and the S&P 500 ended the day just shy of their record closing highs.

The major averages all posted strong gains on the day. The Nasdaq jumped 194.36 points or 1.0 percent to 20,167.91, the Dow advanced 404.41 points or 0.9 percent to 43,386.84 and the S&P 500 climbed 48.86 points or 0.8 percent to 6,141.02.

The markets continued to benefit from recent upward momentum, which has helped propel the major averages well off their April lows despite lingering uncertainty about tariffs.

The advance has helped lift stocks back within striking distance of record levels, with the S&P 500 ending the day just 3 points from its February closing high.

The strength on Wall Street also came following the release of a slew of U.S. economic data, including a Labor Department report showing an unexpected decrease by initial jobless claims in the week ended June 21st.

The Labor Department said initial jobless claims dipped to 236,000, a decrease of 10,000 from the previous week's revised level of 246,000.

Economists had expected jobless claims to come in unchanged compared to the 245,000 originally reported for the previous week.

A separate report released by the Commerce Department showed new orders for U.S. manufactured durable goods spiked by much more than expected in the month of May.

The report said durable goods orders soared by 16.4 percent in May after tumbling by a revised 6.6 percent in April.

Economists had expected durable goods orders to surge by 8.5 percent compared to the 6.3 percent slump that had been reported for the previous month.

Excluding a substantial increase in orders for transportation equipment, durable orders climbed by 0.5 percent in May after coming in unchanged in April. Ex-transportation orders were expected to come in flat.

Meanwhile, revised data released by the Commerce Department showed the U.S. economy shrank by more than previously estimated in the first quarter of 2025.

The Commerce Department said real gross domestic product fell by 0.5 percent in the first quarter compared to the previously reported 0.2 percent dip. Economists had expected the decrease by GDP to be unrevised.

The bigger than previously estimated decline primarily reflecting downward revisions to consumer spending and exports that were partly offset by a downward revision to imports.

Steel stocks showed a substantial move to the upside on the day, with the NYSE Arca Steel Index surging by 3.0 percent to its best closing level in over six months.

An extended rebound by the price of crude oil also contributed to significant strength among oil service stocks, as reflected by the 2.2 percent jump by the Philadelphia Oil Service Index.

Gold, banking and computer hardware stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are climbing $0.30 to $65.54 a barrel after rising $0.32 to $65.24 barrel on Thursday. Meanwhile, after inching up $4.90 to $3,348 an ounce in the previous session, gold futures are tumbling $57.40 to $3,290.60 an ounce.

On the currency front, the U.S. dollar is trading at 144.46 yen versus the 144.42 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1730 compared to yesterday's $1.1701.

Asia

Asian stocks ended mixed on Friday despite U.S. President Donald Trump announcing a trade deal with China on rare earths and hinting at a major upcoming deal with India.

The ceasefire between Iran and Israel continued to hold and weak U.S. data fueled rate cut hopes, helping limit regional losses.

Gold dipped over 1 percent below $3,300 per ounce and the dollar index lingered near its lowest level since March 2022 ahead of the U.S. May Personal Consumption Expenditures (PCE) Price Index data due later in the session.

Oil was on track for its worst weekly loss since March as supply concerns eased.

China's Shanghai Composite Index fell 0.7 percent to 3,424.23 as new data showed Chinese industrial profits fell 9.1 percent year on year in the first five months of the year in the face of deepening deflationary pressures and a persistent property crisis.

Hong Kong's Hang Seng Index finished 0.2 percent lower at 24,284.15 after a White House official said the United States has reached an agreement with China on how to expedite rare earth shipments to the U.S.

Japanese markets ended at a six-month high amid hopes the U.S. will extend the deadline for reciprocal tariffs.

The Nikkei 225 Index jumped 1.4 percent to 40,150.79, marking its highest closing level since December 27th. The broader Topix Index settled 1.3 percent higher at 2,840.54.

Technology stocks followed their U.S. peers higher, supported by positive news around easing tensions in the Middle East and expectations for Fed rate cuts this year. Tokyo Electron surged 4.3 percent and SoftBank Group rallied 2.5 percent.

Defense-related Kawasaki Heavy Industries soared 6.2 percent on expectations of increased defense spending in the country.

Automakers Honda, Toyota and Nissan all gained around 3 percent, tracking a weaker yen as Tokyo's CPI data for June 2025 revealed a milder inflation trajectory than anticipated.

Seoul stocks fell for a second consecutive session due to profit taking. The Kospi ended down 0.8 percent at 3,055.94, dragged down by battery and automotive shares. LG Energy Solution lost 3 percent and Hyundai Motor declined 2.2 percent.

Australian markets gave up early gains to end in the red. Banks fell, offsetting gains in the mining sector. The benchmark S&P/ASX 200 Index dipped 0.4 percent to 8,514.20, while the broader All Ordinaries Index closed 0.3 percent lower at 8,743.60.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index climbed 0.8 percent to close at 12,583.59, marking its second straight session of gains. Europe

European stocks have advanced on Friday after a White House official said the United States has struck a deal with China to expedite rare earth shipments, marking a significant step towards resolving their ongoing trade war.

Beijing said Washington would lift "restrictive measures" while Beijing would "review and approve" items under export controls.

The French CAC 40 Index is up by 1.5 percent, the German DAX Index is up by 0.9 percent and the U.K.'s FTSE 100 Index is up by 0.6 percent.

RTL Group shares have soared. In an unexpected move, the German broadcast giant has agreed to acquire German pay-TV Sky Deutschland.

Switzerland's Sika has also shown a notable move to the upside after buying Qatar-based Gulf Additive Factory.

Bayer AG has also jumped as it secured the European Commission's approval for the eight-milligram dose of its Eylea drug.

Sportswear makers Puma and Adidas have also surged after U.S. peer Nike forecast a smaller-than-expected decline in its first quarter revenue.

U.S. Economic News

The Commerce Department released a closely watched report on Friday showing consumer prices in the U.S. crept up in line with expectations in the month of May.

The report said the personal consumption expenditures (PCE) price index inched up by 0.1 percent in May, matching the uptick seen in April as well as economist estimates.

The annual rate of growth by the PCE price index accelerated to 2.3 percent in May from 2.2 percent in April, which also matched expectations.

Meanwhile, the core PCE price index, which excludes food and energy prices, rose by 0.2 percent in May after inching up by 0.1 percent in April. Economists had expected another 0.1 percent uptick.

The annual rate of growth by the core PCE price index accelerated to 2.7 percent in May from an upwardly revised 2.6 percent in April.

Economists had expected annual rate of growth by the core PCE price index to tick up to 2.6 percent from the 2.5 percent originally reported for the previous month.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income fell by 0.4 percent in May after climbing by 0.7 percent in April, while personal spending edged down by 0.1 percent in May after rising by 0.2 percent in April.

At 9:15 am ET, Cleveland Federal Reserve President Beth Hammack is due to participate in a Fed Listens moderated discussion on labor market conditions, inflation, and interest rates before the "Building Strong and Sustainable Communities" Policy Summit 2025.

The University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of June at 10 am ET. The consumer sentiment index for June is expected to be unrevised from the preliminary reading of 60.5, which was up from 52.2 in May.