Stock Futures Edge Higher, Treasury Yields Tick Up — Update
By Joe StonorU.S. stock futures edged higher as oil prices fell, though Treasury yields largely rose as investors brace for more rate hikes to come.Momentum held behind artificial-intelligence stocks, with chip makers in Asia gaining and AI supply-chain names rallying in Europe. Semiconductor stocks gained in U.S. premarket trade, with Intel climbing 1.2%. Futures for the S&P 500 and Nasdaq were in the green, rising 0.1% and 0.3%, respectively, after both indexes notched their best trading day in six weeks on Thursday. Futures for the Dow Jones Industrial Average fell 0.1%, retreating from gains earlier in the day as oil benchmarks pared losses.Brent crude contracts pared losses over the course of the European day but still remained more than 1.5% down at around $103.50 a barrel. WTI crude futures traded above $101 a barrel after briefly dipping below $100. Investors have been growing more optimistic about Saudi Arabia's ability to restore its East-West pipeline, analysts said.The Bank of Japan raised its policy rate by a quarter of a percentage point earlier Friday, joining other central banks in bumping up rates over the past two weeks. The global move to higher interest rates leaves "little doubt we're in a globally synchronized cycle of rate hikes again," said Deutsche Bank's Jim Reid.U.S. Treasurys weakened across the yield curve, with 10-year yields ticking up to 4.970% and heading toward the 5% level hit earlier this week, while two-year yields added 4.3 basis points to trade at 4.726%. Yields on 30-year Treasurys nudged up to trade close to 5.300%.The Bank of Japan's vote was split, suggesting less support for the hike than had been expected. The yen weakened to a two-week low against the dollar. Meanwhile, the Chinese yuan rose to its strongest level in more than four years as the People's Bank of China ushered the currency higher ahead of the summit between President Trump and Chinese leader Xi Jinping next week.Japan's Nikkei 225 rose 1.7% following the decision, joining a stock-market rally across the Asia-Pacific region. European stocks struggled after a strong session on Thursday, with the continent's more defensively constituted indexes losing out as investors returned to risk. The Europe-wide Stoxx 600 fell 0.8%.Gold strengthened to hold above $4,400 a troy ounce. Bitcoin benefited from a broader return to risk, adding 1.9% to $77,987.60.For the day ahead, European Central Bank President Christine Lagarde will speak, and investors will watch for U.S. industrial production and capacity utilization data for August.Write to Joe Stonor at [email protected]