Dow Futures Rise, China Stimulus Buoys Sentiment—and What Else Is Happening in the Stock Market Today

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It has been a tough week for Wall Street.

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Angela Weiss/AFP via Getty Images

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Stocks rose on Friday as investors looked past a slump that has weighed on markets this week, with fresh stimulus from China boosting global sentiment.

Futures for the Dow Jones Industrial Average rose 280 points, or 0.9%, after the index retreated 236 points on Thursday to close at 31,253. S&P 500 futures signaled a start 1.2% into the green with the tech-stock-heavy Nasdaq poised to climb 1.7%.

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Overseas, the pan-European Stoxx 600 gained 1.2% and Hong Kong’s Hang Seng Index rallied 3%.

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It has been a tough week for stocks. Wednesday marked the worst day for the Dow and S&P 500 since mid-2020 as some $1.5 trillion in market value was wiped away. The risk of a recession as the Federal Reserve tightens monetary policy to tame inflation continues to loom large.

Investors were unable to shake off some of the concerns around how rising costs will eat into corporate profit margins, seeing further declines in stocks on Thursday—though nothing of the scale seen earlier in the week.

“Although equities fell again yesterday it was all fairly orderly,” said Jim Reid, a strategist at Deutsche Bank,
“Barring a major reversal today, the [S&P 500] index is now on track to close lower for a seventh consecutive week for the first time since 2001.”

But sentiment brightened as the last trading day of the week dawned, helped in part by fresh stimulus from the Chinese central bank. The People’s Bank of China lowered the key five-year prime loan rate on Friday for the second time this year; the move to 4.45% to 4.6% was the largest cut on record.

“China’s decision to cut its five-year loan prime rate, a reference rate for mortgages, helped boost risk sentiment going into Friday’s session,” said Neil Wilson, an analyst at broker Markets.com. “There is a decent follow-through,” he added, noting that European indexes and US futures were heading higher as a result.

Write to Jack Denton at [email protected]

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Credit: www.marketwatch.com /

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