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U.S. stock index futures edged higher on Friday, recovering from the previous session’s losses on Wall Street. Investors turned their attention to strong guidance from chipmaker Broadcom and the Federal Reserve’s upcoming policy meeting, set to shape the outlook for interest rates as the year closes.
As of 05:50 ET (10:50 GMT), Dow Jones Futures gained 125 points, or 0.3%, while S&P 500 Futures climbed 22 points, or 0.4%. The tech-heavy Nasdaq 100 Futures outperformed, rising 155 points, or 0.7%, reflecting optimism in the technology sector.
Broadcom Surges on AI-Driven Demand
Broadcom emerged as the highlight of the day, with its stock soaring 15% in premarket trading to a record high. The semiconductor giant posted a robust revenue forecast for the current quarter, driven by surging demand for AI-enabled chips and network infrastructure.
During its earnings call, Broadcom executives emphasized the transformative impact of artificial intelligence on its business, outweighing slightly softer-than-expected quarterly revenue. The company has gained over 60% this year, benefiting from its pivotal role in AI infrastructure development.
Broadcom’s bullish outlook comes as the broader tech sector experiences renewed interest from investors seeking exposure to AI-driven growth opportunities, adding positive momentum to the Nasdaq Composite, which is poised for a weekly gain of 0.2%.
Mixed Weekly Performance for Major Indexes
Despite Friday’s recovery in futures, the Dow Jones Industrial Average is on track to end the week down 1.6%, while the S&P 500 is set for a 0.6% weekly decline. Meanwhile, the Nasdaq Composite remains relatively resilient, underpinned by tech gains.
Other companies drawing attention include home furnishings retailer RH and warehouse giant Costco, both of which reported earnings after Thursday’s close. Investors will scrutinize their results for insights into consumer spending trends amid lingering economic uncertainty.
Federal Reserve Meeting Looms
The Federal Reserve’s last policy-setting meeting of the year next week is anticipated to dominate market focus. A 25 basis point rate cut is widely expected, marking the central bank’s continued shift toward monetary easing. However, recent stronger-than-expected producer price index (PPI) data and steady consumer inflation figures have introduced uncertainty about the pace of future cuts.
While a reduction in rates is likely in the near term, concerns are growing that the Fed may slow its easing trajectory in 2025 if inflationary pressures persist. This uncertainty, sparked by Thursday’s PPI data, has contributed to market volatility this week.
Looking Ahead
With the economic calendar relatively light on Friday, attention will remain on corporate earnings and pre-market activity, setting the stage for next week’s crucial developments. The Fed’s decision will provide critical guidance on the outlook for interest rates, influencing market sentiment as investors prepare for the challenges and opportunities of 2025.
Broadcom’s stellar performance, coupled with hopes for monetary easing, has injected cautious optimism into the markets. Yet, lingering inflation concerns and mixed economic data underscore the complexities of navigating a dynamic investment landscape.
