U.S. stock futures advanced across the board on Friday morning, signaling a firmer open for Wall Street as investors weighed encouraging economic data against fresh concerns over valuation and policy shifts.
Dow Jones Industrial Average futures rose 0.52%, S&P 500 futures gained 0.48%, and Nasdaq 100 futures climbed 0.74% ahead of the opening bell.
European markets showed modest strength, with Germany's DAX up 0.20%, the UK's FTSE 100 adding 0.20%, France's CAC 40 rising 0.15%, and the Euro Stoxx 50 advancing 0.31%.
Oil prices edged lower in early trading, with WTI crude slipping 0.44% to $86.45 per barrel and Brent crude easing 0.38% to $93.42 per barrel.
Where the market stands now
A key debate is unfolding over the Treasury Department's plan to expand debt buybacks. Goldman Sachs strategist Friedrich Schaper argued in a research note that without a shift in the underlying macroeconomic drivers, the impact of an enlarged debt repurchase program would prove "relatively short-lived." While the Treasury is attempting to curb rising borrowing costs, Schaper believes cooling inflation remains the most convincing path to lowering bond yields. Recent data points—including softer retail sales, disappointing employment figures, and subdued core inflation in July—have been encouraging, yet market pricing remains divided. Schaper wrote that "a continued accumulation of mild inflation data would increase confidence that the Federal Reserve will hold its policy rate steady, shifting the risk bias back," which he sees as the clearest route to lower yields at present.
UBS has raised its earnings forecasts and price targets for the S&P 500, citing improving corporate profit prospects and growing confidence in next year's economic growth. The bank now projects S&P 500 earnings per share of $350 for 2026 and $400 for 2027, up from prior estimates of $335 and $375 respectively, implying growth rates of 25% and 14%. UBS also lifted its index targets to 8,100 by December 2026 and 8,400 by June 2027. The upgrade was driven primarily by better-than-expected results in semiconductors, tech hardware, and energy, though earnings expectations were revised higher across nearly all sectors. The bank noted that the breadth of the current market rally continues to expand, with an exceptionally strong second-quarter earnings season and improving cyclical conditions in manufacturing activity and construction employment.
Valuation concerns linger as some warn of a bubble
Former New York Fed President Bill Dudley has cautioned that U.S. equity valuations are clearly in bubble territory. He warned that once the AI investment cycle slows, the earnings, margins, and financing logic currently supporting the rally could reverse simultaneously. Dudley projects the bubble could burst by the end of 2027. He acknowledged that high valuations do not necessarily mean an imminent collapse—bubbles can persist and even expand as rising asset prices feed back into investment and profit growth, reinforcing optimistic sentiment among market participants. The key risk, he noted, is that this positive feedback loop eventually reverses. The most critical inflection point lies in AI capital spending. Should growth in AI capex decelerate, upstream "picks-and-shovels" companies would feel the pressure first: demand growth slows, earnings expectations decline, and margins may compress, ultimately delivering a "double blow" to both valuations and profits.
Citi's foreign exchange strategy team has turned bearish on the dollar in the near term. Led by Daniel Tobon, the team lowered their three-month dollar index forecast from 102.12 to 98.34 in a Thursday research report. They cited the market's gradual digestion of a more dovish Fed stance, midterm election factors, and news that the Treasury may step up debt buybacks. Citi has warned that Treasury Secretary Scott Bessent's latest moves to suppress long-term borrowing costs could come at the expense of dollar weakness. The strategists noted that the Treasury's recent announcement to double its buyback program before November adds new bearish factors for the dollar through two channels: pressuring Treasury yields lower and raising concerns about financial repression policies.
Gold surges toward third straight weekly gain
Spot gold rallied 1.70% to approximately $4,597 per ounce, having briefly touched $4,600 during the session, putting the precious metal on track for a third consecutive weekly advance. The gold price curve is benefiting from a "dual-path" structure triggered by the U.S. government's buybacks of long-dated Treasuries with maturities of ten years or more—falling risk-free rates reduce the opportunity cost of holding gold, while any loss of control over yields would boost the credit premium. For the new bull market narrative around gold, the more significant impact lies in changing market expectations about how the Fed and the U.S. government will respond to policy challenges. If investors come to believe that authorities will deploy larger dollar issuance, lower real interest rates, or more aggressive debt maturity management to prevent long-end financing costs from spiraling, the distribution of gold prices would skew notably upward amid continued dollar depreciation and declining long-term risk-free yields.
Individual stock movers
Technology shares were broadly higher in premarket trading. Optical communications stocks advanced, with Coherent (COHR.US), Lumentum (LITE.US), Astera Labs (ALAB.US), and Nokia (NOK.US) all gaining more than 2%. Credo Technology (CRDO.US) and Corning (GLW.US) rose nearly 2%, while Marvell Technology (MRVL.US) added over 1%. The "Magnificent Seven" mega-cap tech names were all trading higher, with gains under 2%. Memory chip stocks also moved up, with SK Hynix (SKHY.US) climbing over 2%, and Micron Technology (MU.US), Seagate Technology (STX.US), and Western Digital (WDC.US) each gaining more than 1%.
Ross Stores (ROST.US) raised its full-year profit guidance for the second time this year, underscoring the discount retailer's resilience. The company reported second-quarter revenue of $6.3 billion, up 13.9% year over year and exceeding expectations by $140 million. Earnings per share came in at $2.66, beating estimates by $0.71. While the quarter included approximately $0.60 per share in tariff refund benefits, comparable store sales still grew 10%—marking the second consecutive quarter of double-digit same-store sales growth, a feat not achieved in nearly five years. The company now expects full-year EPS of $8.61 to $8.77, up from its prior range of $7.50 to $7.74 and ahead of Wall Street consensus. The midpoint of the new guidance implies 31% growth from the prior year, the strongest rate since 2022. Ross Stores did not provide a full-year same-store sales forecast but guided for 6% to 7% growth in the third quarter and 4% to 5% in the fourth quarter, both above analyst expectations. Shares were up more than 8% in premarket trading.
Broadcom (AVGO.US) is in talks with multiple lenders to arrange a massive AI chip financing package, aiming to raise over $60 billion in debt to fund chip and data center infrastructure acquisitions for AI companies such as Anthropic. Sources familiar with the matter said the total package could reach as much as $100 billion if the subordinated debt portion under discussion is included. This would mark another mega-deal in the AI infrastructure financing boom. For Broadcom, the arrangement would help expand sales of its AI chips and other data center equipment while further challenging Nvidia's (NVDA.US) dominance in the AI computing market.
SK Hynix (SKHY.US) is reportedly considering building a memory chip production facility in Miyagi Prefecture, Japan, with an investment that could reach tens of trillions of Korean won. Citing industry sources, the move is aimed at expanding capacity amid persistently strong global memory chip demand. While the scale is substantial, the Miyagi facility is expected to be relatively smaller compared to SK Hynix's multi-hundred-trillion-won investments in its domestic semiconductor clusters in Yongin and the Hoseo region. Industry analysts suggest the plant would serve as a new overseas production base complementing SK Hynix's domestic operations. If finalized, it would mark the first major semiconductor manufacturing investment by a Korean chipmaker in Japan.
Economic data on tap
Investors will focus on the August S&P Global U.S. manufacturing PMI preliminary reading due at 21:45 Beijing time.
Looking ahead, the combination of softening inflation data, robust corporate earnings, and policy shifts in both fiscal and monetary arenas will likely keep markets on edge as traders position for the weeks ahead.
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