U.S. stocks were poised to open slightly higher, rising in tandem with markets from China to Germany, as they capped a week where investors looked past international trade tensions and bet on a strengthening American economy keeping the rally intact.
Futures pointed to a 0.1% opening rise for the Dow Jones Industrial Average and a less than a 0.1% rise for the S&P 500 after both indexes set new highs in the previous session. It was the S&P 500’s 19th record close this year.
In Europe, the Stoxx Europe 600 was recently up 0.4% following a rally in most Asian markets. Chinese stocks registered their largest one-week percentage gain since March 2016.
The gains come as investors this week mostly shrugged off the imposition of new tariffs in the continuing trade spat between the U.S. and China. Market participants instead focused on the strong fundamental outlook, including solid corporate earnings and a robust U.S. economy, which is growing at its fastest rate since 2014.
“Risk is having a great time at the moment,” said Jim Reid, an analyst at Deutsche Bank, in a note to clients.
Underscoring the robust economic outlook, Labor Department data on Thursday showed that initial jobless claims, a proxy for layoffs across the U.S., fell to the lowest level since 1969.
“The broader picture is clear: the U.S. economy is doing very well,” said Eric Stein, co-director of global income at Boston-based Eaton Vance. “At some point you start to wonder if this is as good as it gets. But we are not there yet.”
The S&P 500 and the Dow Jones Industrial Average both set new highs in Thursday’s session. Photo: bryan r. smith/Agence France-Presse/Getty Images
Investors were also looking to next week’s Federal Reserve meeting. Most watchers are expecting the U.S. central bank to raise interest rates.
“With the economy doing well and inflation not picking up much, it has been easy for the Fed this year,” said Mr. Stein, who is expecting a rate rise next week and one more in December. “A year from now is where it gets more interesting.”
The 10-year U.S. Treasury yield fell slightly to 3.074%, compared with 3.076% on Thursday. Yields move inversely to prices.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.2%.
The British pound fell 0.91% against the dollar after European Union leaders rejected on Thursday the British government’s proposal for how to maintain economic relations with the bloc post-Brexit, piling pressure on Prime Minister Theresa May.
In Asia, Chinese equities led the way, with the Shanghai Composite closing up 2.5%, its biggest gain in six weeks. Japan’s Nikkei Stock Average rose 0.8% while Hong Kong’s Hang Seng finished up 1.7%.
In commodities, Brent crude, the global oil price benchmark, was up 1% while gold was down 0.2%.
Write to Georgi Kantchev at [email protected]