The major U.S. index futures are currently pointing to a sharply lower open on Friday, with stocks likely to give back ground after ending the previous session mostly higher.
Profit taking may contribute to initial weakness on Wall Street following recent strength in the markets, which lifted the Nasdaq and S&P 500 to record highs.
Technology stocks may lead the early pullback, as reflected by the 1.7 percent slump by the tech-heavy Nasdaq 100 futures.
Shares of Intel (INTC) are plummeting by more than 5 percent in pre-market trading, while shares of Micro (MU) are plunging by more than 4 percent and shares of Nvidia (NVDA) are tumbling by more than 3 percent.
A sharp increase in treasury yields is also likely to weigh on the markets, with the yield on the benchmark ten-year note surging to its highest levels in almost a year.
The spike in treasury yields comes as recent data showing significant accelerations in the pace of consumer and producer price inflation has led to concerns about the outlook for interest rates.
CME Group's FedWatch Tool is currently indicating a 38.9 percent chance rates will be a quarter point higher following the Federal Reserve's last meeting of the year, up from just 13.7 percent a week ago.
The downward momentum on Wall Street also comes amid a sharp increase by the price of crude oil, as U.S. crude oil futures are surging by more than 3 percent.
The jump in oil prices comes as the summit between President Donald Trump and his Chinese counterpart Xi Jinping produced warm words but yielded little progress on the U.S. war with Iran.
After ending Wednesday's session modestly lower, the Dow showed a strong move back to the upside during trading on Thursday, closing above 50,000 for the first time in three months.
The Nasdaq and the S&P 500 also moved higher, adding to Wednesday's gains and once again reaching new record closing highs.
The major averages all finished the day firmly positive but off their highs of the session. The Dow advanced 370.26 points or 0.8 percent to 50,063.46, the Nasdaq jumped 232.88 points or 0.9 percent to 26,635.22 and the S&P 500 climbed 56.99 points or 0.9 percent to 7,501.24.
Cisco Systems (CSCO) helped lead the markets higher, with the San Jose-based technology giant soaring by 13.4 percent to a record closing high.
The spike by Cisco comes after the company reported better than expected fiscal third quarter results and provided upbeat guidance. Cisco also revealed plans to cut nearly 4,000 jobs.
Market leader and AI darling Nvidia (NVDA) also surged by 4.4 percent after a report from Reuters said the U.S. has cleared around 10 Chinese firms to buy the company's second-most powerful AI chip, the H200.
The report comes amid a closely watched summit between U.S. President Donald Trump and his Chinese counterpart Xi Jinping in Beijing.
After a nearly two-hour long high-stakes meeting at the Great Hall of the People, Trump described the talks as "great."
The White House said, "The two sides agreed that the Strait of Hormuz must remain open to support the free flow of energy."
A statement issued by China's foreign ministry said the two leaders agreed to a "constructive strategic stable relationship" as the new orientation for bilateral relations over the next three years and beyond.
In U.S. economic news, a report released by the Commerce Department on Thursday showed retail sales in the U.S. increased in line with economist estimates in the month of April.
The Commerce Department said retail sales climbed by 0.5 percent in April after jumping by a downwardly revised 1.6 percent in March. Economists had expected retail sales to grow by 0.5 percent.
Excluding sales by motor vehicle and parts dealers, retail sales increased by 0.7 percent in April after surging by 1.9 percent in March. Ex-auto sales were expected to increase by 0.6 percent.
Meanwhile, the Labor Department released a separate report showing first-time claims for U.S. unemployment benefits rose by more than expected in the week ended May 9th.
The report said initial jobless claims climbed to 211,000, an increase of 12,000 from the previous week's revised level of 199,000. Economists had expected jobless claims to rise to 205,000.
With Cisco leading the way higher, networking stocks showed a substantial move to the upside, driving the NYSE Arca Networking Index up by 3.1 percent to a record closing high.
Considerable strength also emerged among airline stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Airline Index.
Software, oil service and brokerage stocks also saw notable strength on the day, while gold stocks moved sharply lower amid a decrease by the price of the precious metal.
Commodity, Currency Markets
Crude oil futures are surging $3.26 to $104.43 a barrel after inching up $0.15 to $101.17 a barrel on Thursday. Meanwhile, after falling $21.40 to $4,685.30 an ounce in the previous session, gold futures are plunging $132.20 to $4,553.10 an ounce.
On the currency front, the U.S. dollar is trading at 158.55 yen versus the 158.35 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1622 compared to yesterday's $1.1668.
Asia
Asian stocks declined on Friday after U.S. Treasury yields hit one-year highs, prompting traders to increase their bets on a Federal Reserve rate hike this year.
Rising oil prices dented sentiment as attacks on one ship and the seizure of another around the Strait of Hormuz stoked concerns about energy supplies.
The Trump-Xi summit has so far produced warm words but yielded little progress on the war in Iran.
After a high-stakes meeting, U.S. President Donald Trump claimed China intends to purchase U.S. oil and soybeans. He also said that the Chinese President has assured him that Beijing would not provide military equipment to Iran.
The dollar rose alongside higher U.S. Treasury yields and was on track for its biggest weekly gain in more than two months.
Gold fell nearly 2 percent to $4,579 an ounce, while Brent crude futures traded above $107 a barrel after Trump warned Iran to make a deal or face "annihilation."
China's Shanghai Composite Index slumped 1 percent to 4,135.39 after U.S. Trade Representative Jamieson Greer told Bloomberg TV that Washinton's strict chip export controls against China were "not a major topic of discussion" during bilateral talks.
Hong Kong's Hang Seng Index tumbled 1.6 percent to 25,962.73 as the Trump-Xi summit concluded with minimal deals.
Japanese stocks lost ground on inflation and interest-rate concerns after data showed the producer price Index jumped 4.9 percent in April on higher energy costs, marking the fastest annual increase since May 2023.
The Nikkei 225 Index dove 2 percent to 61,409.29 on speculation that the Bank of Japan will respond with rate hikes to limit fallout from rising energy prices. The broader Topix Index settled 0.4 percent lower at 3,863.97.
Tech stocks suffered heavy losses due to profit taking, with Advantest plunging 7.9 percent and Tokyo Electron losing 1.8 percent.
Seoul stocks plummeted after data showed South Korea's export prices surged 40.8 percent year-on-year in April, putting immense pressure on the Bank of Korea to raise interest rates at its next meeting in a few weeks.
The Kospi topped 8,000 points for the first time before coming under significant selling pressure to end 6.1 percent lower at 7,493.18.
Investors took profits from large-cap semiconductor and technology shares, with Samsung Electronics plunging 8.6 percent and SK Hynix falling 7.7 percent.
Australian markets ended marginally lower as mining stocks fell after days of record gains, offsetting a continued recovery in bank stocks following Tuesday's federal budget.
The benchmark S&P/ASX 200 Index edged down 0.1 percent to 8,630.80, while the broader All Ordinaries Index closed 0.2 percent lower at 8,870.60.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index dropped 0.5 percent to 12,965.01 after a survey showed manufacturing activity growth in the country slowed to a six-month low in April as a result of increased costs and disrupted supply chains.
Europe
European shares have moved sharply lower on Friday, with inflation concerns and disappointment over U.S.-China trade talks keeping investors on edge.
After wrapping up his three-day visit to China, U.S. President Donald Trump said he will not be much more patient with Tehran.
Hormuz concerns persist despite Iran's Revolutionary Guards claiming around 30 vessels had crossed the strait since Wednesday evening.
In a lengthy Truth Social post, U.S. President Donald Trump suggested he may resume the war against Iran after he returns from his trip to China.
While the French CAC 40 Index is down by 1.6 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both down by 2 percent.
LVMH shares have fallen. The French luxury giant said it has signed a definitive agreement to sell the Marc Jacobs brand to WHP Global.
Unite Group has also declined. The British student accommodation landlord reiterated its adjusted EPS guidance for full year 2026.
Centrica has also tumbled. The British Gas owner has agreed to pay 20 million pounds into a redress fund following an investigation into its past prepayment meter installation practices.
Meanwhile, German telecommunications and web content provider Freenet has risen after posting better-than-expected results for the first quarter of 2026.
U.S. Economic News
New York manufacturing activity grew strongly in the month of May, the Federal Reserve Bank of New York said in a report released on Friday.
The New York Fed said its general business conditions index jumped to 19.6 in May from 11.0 in April, with a positive reading indicating growth. The increase surprised economists, who had expected the index to pull back to 7.8.
Looking ahead, the New York Fed said firms became more optimistic about the outlook, with the index for future business conditions surging to 33.5 in May from 19.6 in April.
At 9:15 am ET, the Federal Reserve is scheduled to release its report on industrial production in the month of April. Industrial production is expected to rise by 0.3 percent in April after falling by 0.5 percent in March.
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May 08, 2026 15:50 ET Manufacturing and services sector survey results and labor market data from main economies were the highlight on the economics news front this week. Factory orders and jobs report dominated the news flow in the U.S. Similarly, industrial production data from German garnered attention in Europe. In Asia, purchasing managers’ survey results from China and the central bank decision from Australia were in focus.