Dow futures edged higher on Friday as investors displayed cautious optimism in the backdrop of the US government shutdown entering its tenth day.
Extra focus is expected to be poured on the University of Michigan’s consumer sentiment report, which is set to release on Friday, as investors look for an economic anchor amid data scarcity due to the shutdown.
This week has been a bit volatile for equities as Wall Street indices pulled back from the record highs, but Friday came up with a positive start for futures tied to Dow, Nasdaq, and S&P 500.
A renewed enthusiasm around the booming AI industry and next week’s earnings call is expected to keep investors on their toes.
5 things to know before Wall Street opens
1. Analysts are keeping an eye on the University of Michigan’s consumer sentiment report, and the mood doesn’t look particularly upbeat.
Confidence among American households seems to be softening again, with the preliminary index expected to fall for a third month in a row. People are feeling the pinch from persistent inflation, ongoing tariffs, and a shaky labor market.
The numbers could slip below last month’s 55.1 reading, with estimates around 54.6, pointing to a more cautious outlook as we head into the holiday season.
2. Joshua Mahony, chief market analyst at Scope Markets, provided his commentary on the ongoing situation and said:
“US stock futures are showing tentative gains as investors continue to weigh up the implications of a government shutdown that enters its tenth day.”
“According to the Kalshi prediction market, the current forecast signals a possible 24-day shutdown this time around. The standoff in Washington remains unresolved, though some lawmakers have signalled a willingness to compromise on healthcare subsidies to end the impasse,” Joshua added.
3. Next week kicks off earnings season, and all eyes will be on JPMorgan and Citigroup to set the tone.
Markets are taking a cautious, wait-and-see approach.
Even with stock valuations looking high, analysts are expecting solid revenue growth, thanks to strong investment banking and trading activity, which has some optimism around sector earnings.
That said, sentiment is still guarded. Any weak results could spark sharper market sell-offs, potentially outweighing the impact of positive surprises.
4. Wall Street is showing a cautiously bullish vibe right now. The S&P 500 and Nasdaq have been holding above their 50-day moving averages for over 110 sessions, which points to solid momentum in the short to medium term.
The S&P 500’s RSI is sitting around 67, suggesting the market is bullish but edging toward overbought levels.
The Dow Jones is also finding support at its 50-day SMA, though its RSI hints that we might see a brief pause or mild pullback before the uptrend continues.
5. Asian markets mostly edged lower on Friday, as investors stayed cautious, weighing mixed economic signals and ongoing geopolitical tensions.
The Nikkei and Hang Seng slipped a bit, reflecting worries about global growth and the potential impact of US monetary policy moves.
In Europe, markets were more mixed but held up relatively well.
The FTSE 100 and Stoxx 600 hovered near recent highs, with investors focusing on corporate earnings previews and some easing in geopolitical risks, especially around the Israel-Gaza situation, which helped keep sentiment steady despite broader global uncertainty.
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