The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to regain ground after moving mostly lower over the course of the previous session.
The tech-heavy Nasdaq is likely to benefit from a surge by shares of Broadcom (NASDAQ:AVGO), as the chipmaker is soaring by 17.5 percent in pre-market trading.
The spike by Broadcom comes after the company reported better than expected fiscal fourth quarter earnings and said it expects continued strong demand for its custom AI chips.
Stocks may also benefit from optimism about the outlook for interest rates ahead of next week’s Federal Reserve meeting.
The Fed is widely expected to lower interest rates by another 25 basis points, although traders are likely to pay close attention to the accompanying statement for clues about future rate cuts.
Recent data showing inflation remains sticky has led to worries the Fed will lower rates slower than previously anticipated next year.
CME Group’s FedWatch Tool is currently indicating a 96.4 percent chance the Fed will cut rates by a quarter point next week but a 74.6 percent chance the central bank will then leave rates unchanged in late January.
On the inflation front, the Labor Department released a report this morning showing import prices in the U.S. unexpectedly edged higher in the month of November.
Stocks recovered from an early pullback during trading on Thursday but moved back to the downside over the course of the session. With the downward move, the Dow closed lower for the sixth consecutive session.
The major averages fell to new lows for the session going into the close of trading. The Dow slid 234.44 points or 0.5 percent to 43,914.12, the Nasdaq declined 132.05 points or 0.7 percent to 19,902.84 and the S&P 500 fell 32.94 points or 0.5 percent to 6,051.25.
The weakness on Wall Street came as some traders looked to cash in on the strong performance seen on Wednesday, when the tech-heavy Nasdaq closed above 20,000 for the first time ever.
Some negative sentiment was also generated in reaction to a Labor Department report showing producer prices in the U.S. increased by more than expected in the month of November.
The Labor Department said its producer price index for final demand climbed by 0.4 percent in November after rising by an upwardly revised 0.3 percent in October.
Economists had expected producer prices to inch up by 0.2 percent, matching the uptick originally reported for the previous month.
The report also said the annual rate of producer price growth accelerated to 3.0 percent in November from an upwardly revised 2.6 percent in October.
The annual rate of producer price growth was expected to rise to 2.6 percent from the 2.4 percent originally reported for the previous month.
While the Federal Reserve is still widely expected to lower interest rates next week, the data has raised some concerns about how quickly the central bank will cut rates early next year.
Gold stocks pulled back sharply along with the price of the precious metal, with the NYSE Arca Gold Bugs Index plunging by 3.8 percent after ending Wednesday’s session at its best closing level in over a month.
Significant weakness was also visible among steel stocks, as reflected by the 2.7 percent slump by the NYSE Arca Steel Index.
Airline stocks also came under pressure over the course of the session, dragging the NYSE Arca Airline Index down by 2.5 percent.
Energy stocks also saw considerable weakness amid a decrease by the price of crude oil, while networking stocks showed a notable move to the upside on the day.
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