By Peter Nurse
Investing.com - U.S. stocks are seen opening mixed Friday, struggling to gain traction at the end of what looks like being a losing week following the Federal Reserve’s latest update.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was down 70 points, or 0.2%, S&P 500 Futures traded 5 points, or 0.1%, lower, and Nasdaq 100 Futures climbed 20 points, or 0.1%.
The U.S. Federal Reserve indicating the likelihood of raising interest rate raises in 2023, a year earlier than expected, has hit large parts of the equity markets as investors begin to adjust to a reality without the very easy funding conditions that the central bank ensured as the pandemic hit economic activity.
On Thursday, the blue-chip Dow Jones Industrial Average dropped 0.6%, broad-based S&P 500 closed 0.1% lower, while the tech-heavy Nasdaq Composite outperformed, gaining 0.9%.
For the week to date, the Dow has fallen 1.9%, the S&P 500 has dropped 0.6%, while the Nasdaq has gained 0.7%.
This change in tone happened after investment flows into global equity funds jumped to the highest in three weeks in the week ended June 16, although it was European equities that received the most attention.
Global equity funds received a net $10.3 billion in the week ended June 16, compared with about $13 billion outflows in the previous week, data from Refinitiv Lipper showed.
European equity funds led inflows, luring $8.6 billion, while U.S. equity funds and Asian equity funds had net purchases worth $0.4 billion and $1.2 billion, respectively.
There are no economic numbers of note due later and the earnings slate is largely empty. But it's a triple witching Friday, with options and futures on indexes and equities set to expire, which could lead to a volatile trading day.
In corporate news, Adobe (NASDAQ:ADBE) will be in the spotlight after the software giant easily beat second-quarter targets after the close Thursday, while retailer Kroger (NYSE:KR) raised its guidance for 2021.
Crude oil prices weakened further Friday, continuing to slip in the wake of the stronger dollar on the back of the hawkish Fed tone, but remained near multi-year highs.
By 7:05 AM ET, U.S. crude was down 0.5% at $70.69 a barrel, while Brent was down 0.7% at $72.59.
The US Dollar Index, which tracks the greenback against a basket of six other currencies, hit a more than two-month high earlier Friday, and is on course for a weekly gain of 1.5%, its largest since September.
A stronger dollar makes oil priced in the U.S. currency more expensive in other currencies, potentially weighing on demand. That said, losses have been limited, and the two benchmark oil contracts remain near multi-year highs, still on course to end the week largely unchanged.
On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018.
Later Friday, traders will focus on the latest weekly update from Baker Hughes of the number of oil rigs, while the CFTC will release its weekly commitments of traders report.