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Futures Pointing To Initial Strength On Wall Street After Yesterday's Volatility

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to see initial strength following the extreme volatility seen in the previous session.

Traders may once again attempt to go bargain hunting following the sharp decline shown by the markets over the past month.

The Dow and the S&P 500 ended yesterday's trading well off their lows of the session but still finished the day at their lowest closing levels in over a year.

However, recent bargain hunting efforts have largely been thwarted by worries about the Federal Reserve aggressively raising interest rates in an effort to combat elevated inflation.

Fed Chair Jerome Powell's comments suggesting executing a "soft landing" for the economy may be out of the central bank's control may also limit buying interest.

"There are huge events, geopolitical events going on around the world that are going to play a very important role in the economy in the next year or so," Powell said in an interview on NPR's "Marketplace" on Thursday.

He added, "So the question whether we can execute a soft landing or not, it may actually depend on factors that we don't control."

In U.S. economic news, the Labor Department released a report showing imports prices were unexpectedly unchanged in the month of April.

Stocks saw substantial volatility over the course of the trading day on Thursday before ending the day little changed. After showing wild swings as the day progressed, the major averages closed narrowly mixed.

The major averages showed a notable recovery going into the close, with the tech-heavy Nasdaq inching up 6.73 points or 0.1 percent to 11,370.96. Meanwhile, the S&P 500 edged down 5.10 points or 0.1 percent to 3,930.08 and the narrower Dow dipped 103.81 points or 0.3 percent at 31,730.30.

The volatility on Wall Street came as traders continued to debate whether the markets have hit their bottom, with the major averages falling to their worst levels in over a year.

Traders have recently expressed concerns more aggressive moves by the Fed and other central banks could lead to a period of stagflation or an outright recession.

Adding to the worries, the Labor Department released a report this morning showing the annual rate of producer price growth slowed by less than expected in the month of April.

The report showed the annual rate of growth in producer prices slowed to 11.0 percent in April from a record high 11.5 percent in March, although economists had expected a bigger slowdown to 10.7 percent.

Core producer prices, which exclude prices for food, energy and trade services, were up by 6.9 percent compared to a year ago, reflecting a modest slowdown from the 7.1 percent spike seen in the previous month.

A separate report released by the Labor Department unexpectedly showed a slight increase in first-time claims for U.S. unemployment benefits in the week ended May 7th.

The Labor Department said initial jobless claims crept up to 203,000, an increase of 1,000 from the previous week's revised level of 202,000.

The uptick surprised economists, who had expected jobless claims to dip to 195,000 from the 200,000 originally reported for the previous week.

Gold stocks showed a substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 4.4 percent to its lowest closing level in well over three months.

The sell-off by gold stocks came amid a sharp drop by the price of the precious metal, with gold for June delivery tumbling $29.10 to $1,824.60 an ounce.

Significant weakness was also visible among airline stocks, as reflected by the 1.8 percent drop by the NYSE Arca Airline Index, which fell to a two-month closing low.

On the other hand, housing stocks moved sharply higher on the day, driving the Philadelphia Housing Sector Index up by 3.4 percent. The index rebounded after ending the previous session at its lowest closing level in over a year.

Biotechnology stocks also regained considerable ground, with the NYSE Arca Biotechnology Index jumping by 2.2 percent after ending the previous session at a more than one-year closing low.

Commodity, Currency Markets

Crude oil futures are jumping $1.99 to $108.12 a barrel after rising $0.42 to $106.13 a barrel on Thursday. Meanwhile, after tumbling $29.10 to $1,824.60 an ounce in the previous session, gold futures are falling $15.60 to $1,809 an ounce.

On the currency front, the U.S. dollar is trading at 128.88 yen versus the 128.34 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0381 compared to yesterday's $1.0400.

Asia

Asian stocks rose on Friday after the latest U.S. consumer and producer price data confirmed a slowdown in inflation. There is a broad sense among market participants that larger 75 basis point U.S. rate hikes are off the table for now.

China's Shanghai Composite Index jumped 1 percent to 3,084.28 after officials denied rumors that Beijing will be put into a Shanghai-style lockdown because of a persistent Covid-19 outbreak. Separately, Shanghai said it is aiming to reach zero-COVID at the community level in the next few days.

Hong Kong's Hang Seng Index climbed surged 2.7 percent to 19,898.77, led by gains in tech giants and property developers.

Japanese shares posted strong gains, after having hit a two-month low in the previous session. The Nikkei 225 Index soared 2.6 percent to 26,427.65, marking its sharpest single-day rise since March 23.

Heavyweight SoftBank Group jumped 12.2 percent after saying it plans to take its British chip designer Arm public. Tokyo Electron added 5.5 percent after its full-year profit forecast beat estimates.

Meanwhile, Nissan Motor fell 2.9 percent after its fourth-quarter net profit missed analysts' estimates.

Seoul stocks rose sharply to snap an eight-day losing streak as investors scooped up large-cap stocks such as Samsung Electronics, SK Hynix and Hyundai Motor.

The Kospi rallied 2.1 percent to settle at 2,604.24 after plunging more than 5 percent over the past eight sessions through Thursday.

Australian markets bounced back after a week of heavy selling on concerns over high inflation and COVID-19 lockdowns in China. The benchmark S&P/ASX 200 Index jumped 1.9 percent to 7,075.10 — marking its best day since January 28.

Tech stocks outperformed, with WiseTech Global, Xero and Block Inc and Xero surging 7-15 percent. Miners, energy stocks and banks also rose on broad-based buying.

New Zealand shares ended flat, with the benchmark NZX-50 Ondex slipping marginally to close at 11,168.18 after the release of weak manufacturing data.

Europe

European stocks have bounced back on Friday after a bruising week on concerns over further interest rate increases and slowing global economic growth.

U.S. Federal Reserve Chairman Jerome Powell cautioned Thursday that getting inflation under control won't be easy and that he could not guarantee a so-called "soft landing" for the world's largest economy.

In economic news, French inflation was confirmed at an annual 5.4 percent in April.

Industrial output in the euro zone fell an annualized 0.8 percent in March versus a -0.6 percent decline expected, Eurostat data showed.

While the German DAX Index has jumped by 1.6 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index are up by 1.8 percent and 1.9 percent, respectively.

Finland's state-controlled utility Fortum Oyj has moved sharply higher after saying it is getting ready to leave Russia.

Software specialist Sage Group has also risen after it reported five percent year-on-year organic revenue growth in its half-year results.

Investment company Bridgepoint Group has also soared following its annual general meeting.

Renault shares have also jumped. The French carmaker said it was studying the option of creating two separate entities, including one specializing in the development and research of electric vehicles (EVs).

Germany's Deutsche Telekom AG has also advanced after it reported quarterly core profit and revenue above market estimates.

Real estate investment company Deutsche EuroShop has also moved higher after its first quarter funds from operations adjusted for measurements and special effects rose 39 percent from last year.

On the other hand, Belgian pharmaceutical company UCB has slumped after the U.S. Food and Drug Administration didn't approve a key psoriasis drug.

Telecommunications company Vodafone has also declined as Jefferies downgraded its rating on the company's stock to Hold and cut the price target, citing "intractable headwinds."

U.S. Economic Reports

After reporting a sharp increase in U.S. import prices in the previous month, the Labor Department released a report on Friday showing imports prices were unexpectedly unchanged in the month of April.

The Labor Department said import prices came in flat in April after surging by an upwardly revised 2.9 percent in March.

Economists had expected import prices to climb by 0.6 percent compared to the 2.6 percent jump originally reported for the previous month.

Meanwhile, the report showed export prices advanced by 0.6 percent in April after soaring by a downwardly revised 4.1 percent in March.

Export prices were expected to increase by 0.7 percent compared to the 4.5 percent spike originally reported for the previous month.

At 10 am ET, the University of Michigan is due to release its preliminary report on consumer sentiment in the month of May. The consumer sentiment index is expected to dip to 64.0 in May from 65.2 in April.

Minneapolis Federal Reserve President Neel Kashkari is scheduled to speak in a virtual event about energy prices and their influence on inflation at 11 am ET.

At 12 pm ET, Cleveland Federal Reserve President Loretta Mester is due to participate in a virtual International Research Forum on Monetary Policy panel.

Stocks In Focus

Shares of Affirm Holdings (AFRM) are soaring in pre-market trading after the financial technology company reported a much narrower than expected fiscal third quarter loss and raised its full-year revenue guidance.

Trading platform Robinhood Markets (HOOD) is also seeing substantial pre-market strength after a SEC filing revealed Sam Bankman-Fried, CEO of cryptocurrency exchange FTX Trading, has taken a 7.6 percent stake in the company.

On the other hand, shares of Twitter (TWTR) may come under pressure after Tesla (TSLA) CEO Elon Musk said his takeover of the social media giant is "temporarily on hold" pending details on the number of fake and spam accounts.

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