Market Analysis

The major U.S. index futures are currently pointing to a higher open on Friday, with stocks likely to extend the upward move seen over the course of the previous session.

Strength in overseas markets may carry over onto Wall Street early in the session, as stocks look to snap a three-week losing streak.

Reflecting the rally on Tuesday and the late-day advance on Thursday, the major averages are starting the day posting strong gains for the week.

Potentially adding to the positive sentiment, shares of FedEx (FDX) are seeing pre-market strength after the delivery giant narrowly missed fiscal fourth quarter earnings estimates but provided upbeat guidance for the current year.

Stocks extended the volatility seen during Thursday’s session, fluctuating over the course of the trading day on Friday. Benefiting from the some late-day strength, the major averages all ended the session firmly in positive territory.

The Nasdaq and the S&P 500 reached new highs for the session going into the close of trading. The Dow climbed 194.23 points or 0.6 percent to 30,677.36, the Nasdaq surged 179.11 points or 1.6 percent to 11,232.19 and the S&P 500 jumped 35.84 points or 1 percent at 3,795.73.

The markets continued to experience choppy trading as traders weighed going bargain hunting following recent weakness against the possibility of a global recession.

Traders kept an eye on Federal Reserve Chair Jerome Powell's before the House Financial Services Committee, with the Fed chief reiterating his commitment to moving expeditiously to bring inflation back down.

The Fed's plans to aggressively raise interest rates to combat inflation has led to concerns tighter monetary policy will tip the economy into a recession.

Powell has acknowledged that achieving a "soft landing" will be "very challenging" due in part to factors outside of the Fed's control and noted a recession is "certainly a possibility."

In U.S. economic news, the Labor Department released a report showing first-time claims for U.S. unemployment benefits edged slightly lower in the week ended June 18th.

The report showed initial jobless claims dipped to 229,000, a decrease of 2,000 from the previous week's revised level of 231,000.

Economists had expected jobless claims to slip to 227,000 from the 229,000 originally reported for the previous week.

Biotechnology stocks moved sharply higher over the course of the session, driving the NYSE Arca Biotechnology Index up by 4.4 percent.

Substantial strength was also visible among housing stocks, as reflected by the 3.1 percent spike by the Philadelphia Housing Sector Index.

Retail, utilities and healthcare stocks also turned in strong performances on the day, contributing to the higher close by the broader markets.

On the other hand, energy stocks extended the sell-off seen in the previous session as the price of crude oil showed another steep drop.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plummeted by 4.8 percent and the NYSE Arca Oil Index plunged by 3.7 percent.

Gold, steel and banking stocks also saw significant weakness, partly offsetting the strength seen in the aforementioned sectors.

Commodity, Currency Markets

Crude oil futures are jumping $2.25 to $106.52 a barrel after slumping $1.92 to $104.27 a barrel on Thursday. Meanwhile, after falling $8.60 to $1,829.80 an ounce in the previous session, gold futures are slipping $5 to $1,824.80 an ounce.

On the currency front, the U.S. dollar is trading at 135.10 yen versus the 134.95 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0529 compared to yesterday’s $1.0523.

Asia

Asian stocks found some support on Friday, as a continuous decline in commodities from crude oil to metals to cotton helped ease fears around runaway inflation.

China's Shanghai Composite Index closed 0.9 percent higher at 3,349.75 amid signs that the technology crackdown is softening. Hong Kong's Hang Seng Index rallied 2.1 percent to 21,719.06 after China vowed more pro-growth policies.

Japanese shares advanced as tech stocks tracked overnight gains on Wall Street. The Nikkei 225 Index jumped 1.2 percent to 26,491.97, while the broader Topix closed 0.8 percent higher at 1,866.72.

Chip-making equipment maker Tokyo Electron surged 4 percent, Advantest rallied 3.5 percent and Screen Holdings added 2.7 percent. Pharmaceutical company Shionogi & Co. soared 5 percent on share buyback news.

The battered yen found some support after Japan's annual core consumer inflation topped the central bank's target for a second straight month in May but wage growth was subdued, casting doubt over the sustainability of cost-push inflation.

Seoul stocks rose sharply, a day after hitting a 19-month low on growing concerns about a recession. The Kospi surged 2.3 percent to settle at 2,366.60 as institutional investors bought beaten-down tech stocks.

Samsung Electronics rose 1.7 percent, SK Hynix gained 1.6 percent and Naver spiked 5.8 percent.

Australian markets ended notably higher, helped by gains in technology stocks as commodity-related energy and mining stocks fell on recession concerns.

Buy now, pay later firm Zip Co. jumped 21.6 percent and rival Block Inc climbed nearly 11 percent. Qantas Airways dropped 1.6 percent after slashing domestic flight schedules through March 2023.

The benchmark S&P/ASX 200 Index rose 0.8 percent to 6,578.70, while the broader All Ordinaries Index closed 1.1 percent higher at 6,762.40. New Zealand's stock market was closed for a public holiday.

Europe

European stocks have advanced on Friday as near-term worries around inflation eased somewhat amid growing concerns about a recession. As commodities extend declines, investors are expressing hopes that inflation will start easing.

Markets ignored survey results showing that German business morale fell more than expected in June. The Ifo Institute said its business climax index dropped to 92.3 from 93.0 in May.

Elsewhere, U.K. retail sales declined in May due to lower food sales, while British consumer confidence declined to a new record low in June, separate reports showed.

While the French CAC 40 Index has spiked by 2 percent, the U.K.’s FTSE 100 Index is up by 1.6 percent and the German DAX Index is up by 1 percent.

Swiss insurance firm Zurich Insurance Group has jumped after it agreed to sell its legacy traditional life insurance back book in Germany to Viridium Holding AG.

Ultra Electronics has also soared in London after Cobham received the green light to take over the defense supplier.

Plumbing and heating products distributor Ferguson has also advanced on share buyback news.

Sanofi and GSK have also jumped percent after the drug giants announced positive data from their vaccine trial, which evaluated an adjuvanted bivalent D614 and Beta (B.1.351) vaccine candidate.

On the other hand, TUI AG, a German leisure, travel, and tourism company, has fallen after its CEO resigned in an abrupt move.

Italian oil & gas contractor Saipem has also plunged. The company said that the financial resources available to the group would be exhausted by the first quarter of 2023 if its plans to raise capital did not go through.

Zalando has also slumped after the German online fashion retailer cut its full-year outlook, citing deteriorating macro conditions and consumer confidence.

U.S. Economic Reports

The Commerce Department is scheduled to release its report on new home sales in the month of May at 10 am ET. New home sales are expected to dip by 0.5 percent to an annual rate of 588,000 in May after plunging by 16.6 percent to a rate of 591,000 in April.

Also at 10 am ET, the University of Michigan is due to release its revised reading on consumer sentiment in the month of June. The consumer sentiment index is expected to be unrevised at a record low 50.2.

San Francisco Federal Reserve President Mary Daly is scheduled to speak on monetary policy before a hybrid Shadow Open Market Conference hosted by Chapman University at 4 pm ET.

Stocks In Focus

Shares of Zendesk (ZEN) are soaring in pre-market trading following reports the software maker is close to reaching a deal to be acquired by a group of private equity firms led by Hellman & Friedman and Permira.

Seagen (SGEN) is also likely to see initial strength after a report from the Wall Street Journal said Merck (MRK) is pushing forward with a potential deal for the biotechnology company.

On the other hand, shares of LendingTree (TREE) may come under pressure after the online lender lowered its guidance for the current quarter.