Stock futures rose Friday after China said it would ease some Covid measures, building on optimism from lighter-than-feared inflation data that fueled a broad market rally in the previous session.
S&P 500 gained 0.1%, and the Dow rose 0.1%, and the Nasdaq Composite was flat.
Shares of U.S.-listed Chinese stocks jumped in the premarket after China said it would lift some Covid restrictions, shortening quarantine time for international travelers by two days. Shares of Alibaba, Pinduoduo and JD.com were up about 5%, 5.5% and 8%, respectively.
Other stocks with high exposure to China popped on the news. Shares of casino operators Wynn Resorts and Las Vegas Sands were up more than 4% and 3% in the premarket.
The news built on Thursday’s rally when the major averages posted their biggest one-day gains since 2020. The Dow jumped more than 1,200 points following a smaller-than-expected rise in consumer prices for the month of October, giving investors hope that inflation may be cooling. The S&P rose 5.5%, and the Nasdaq Composite surged about 7.4%.
Treasury yields plunged Thursday on the back of the weaker-than-expected inflation print, with the 10-year Treasury yield falling down to 3.811%. The 2-year yield dropped to 4.33%.
“From an equity market perspective, as long as the threat of much higher rates is out the way, this should remove a major headwind,” Barclays’ Emmanuel Cau wrote in a Friday note.
All of the indexes are on pace for a winning week. The Dow is up 4% on a weekly basis, while the S&P and Nasdaq are on pace for increases of 4.9% and 6.1%, respectively. The three averages are also on track for a positive month.
Investors are looking forward to preliminary University of Michigan consumer sentiment data, due out at 10 a.m. ET.
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