Wall Street’s main indexes rallied on Friday after a report said the U.S. central bank will likely debate on a smaller interest rate hike in December, spurring expectations that it may be poised to dial down its ultra-hawkish stance on fighting inflation.
U.S. Treasury yields slipped following the report, with the 10-year yield last seen at 4.16% after hitting 2007 highs at 4.34% on Friday.
All the three major indexes notched their biggest weekly percentage gains in four months on Friday, also supported by better-than-expected earnings reports.
Of the 99 companies in the S&P 500 that reported third-quarter earnings through Friday, 74.7% had beat analysts’ expectations, according to Refinitiv IBES estimates. The long-term average is 66.2%.
Google-parent Alphabet Inc and Microsoft Corp will report on Tuesday, followed by Apple Inc and Amazon.com Inc on Thursday.
The benchmark S&P 500 is up nearly 5% from its Oct. 12 closing low for the year. Despite the recent rebound, the index is down 21% so far in 2022, on track for its biggest decline since 2008.
Meanwhile, U.S.-listed shares of Chinese companies such as Alibaba Group Holding Ltd and Baidu Inc suffered sharp losses in premarket trading, down more than 12% each, as President Xi Jinping’s new leadership team heightened fears that growth will be sacrificed for ideology-driven policies.
Tesla fell 2.4% after the electric-car maker cut starter prices for its Model 3 and Model Y cars by as much as 9% in China, reversing a trend of increases across the industry amid signs of softening demand in the world’s largest auto market.
At 7:17 a.m. ET, Dow e-minis were up 122 points, or 0.39%, S&P 500 e-minis were up 13 points, or 0.35%, and Nasdaq 100 e-minis were up 20.25 points, or 0.18%.
Investors will be watching S&P Global’s flash survey on U.S. business activity in October, due at 9:45 a.m. ET, for clues on the health of the U.S. economy amid rapidly rising interest rates.