U.S. equity futures edged higher in a shortened holiday session on Friday, with the Nasdaq 100 leading the charge as markets remained closed for Juneteenth. The New York Stock Exchange and Nasdaq cash markets were shut for the federal holiday, but futures trading indicated a positive tone heading into next week.
Nasdaq 100 futures jumped 1.18% to 30,620.50, while S&P 500 futures added 0.62% to 7,554.75. Dow Jones futures were nearly flat, slipping just 0.01% to 51,958. The thin trading volume typical of holiday sessions can make futures signals less reliable, but the moves reflected optimism from Thursday's rally.
This week saw sharp swings in market sentiment. A hawkish Federal Reserve stance early in the week triggered a selloff, but a pause on Iran oil worries and a chip-driven rebound reversed much of those losses. On Thursday, the S&P 500 rose 1.1% to 7,500.58, the Nasdaq Composite gained 1.9% to 26,517.93, and the Dow edged up 0.1% to 51,564.70. For the week, the Nasdaq finished up 2.4%, the S&P 500 rose 0.9%, and the Dow gained 0.7%.
The rebound extended beyond typical pre-holiday positioning. It followed a heavy selloff after the Federal Reserve held rates at 3.50%-3.75% and reiterated its commitment to price stability. The Fed's updated projections showed nine of 19 policymakers now see rate hikes as possible this year, while the median year-end PCE inflation forecast rose to 3.6% from 2.7% in March.
Michael James, managing director and equity sales trader at Rosenblatt Securities, described the Fed's stance as a “hawkish tilt,” highlighting its focus on inflation. Kay Haigh, global head of fixed income and liquidity solutions at Goldman Sachs Asset Management, noted that the shift “is not just about higher energy prices,” suggesting broader inflationary pressures.
Semiconductor stocks were a key driver of the rally. Intel surged after President Donald Trump announced that Apple would partner with the company to design and manufacture chips in the U.S., boosting Intel's foundry ambitions. Apple's supply chain remains heavily tied to TSMC, which also produces chips for Nvidia and AMD.
Broader market optimism may be tempered by lingering uncertainties. Oil prices dropped after a U.S.-Iran deal on the Strait of Hormuz, fueling a risk-on mood earlier in the week. Gene Goldman, CIO at Cetera Investment Management, called Monday’s rally a “classic relief rally.” However, renewed rate expectations have made growth stocks vulnerable to rising yields.
Geopolitical risks remain. Switzerland said Friday that planned U.S.-Iran talks would not take place, adding uncertainty to efforts to reopen the Strait of Hormuz. Any setback could push energy prices higher again. A strong inflation reading next week would add further pressure on the Fed.
Next week’s economic calendar is packed. The New York Fed will release consumer confidence data on June 23, followed by new-home sales on June 24. On June 25, traders will see jobless claims, durable goods orders, final Q1 GDP, and personal income along with the PCE deflator. These reports will test whether Thursday’s bounce was genuine buying or just pre-holiday positioning.
