Wall Street's main indexes were expected to open flat on Friday as early concerns about escalating conflicts in the Middle East eased, while Netflix shares fell after forecasting its latest quarterly earnings below estimates.
So far reports indicate that there has been no counterattack from Iran to the string of explosions that occurred on Friday in Iran. According to Peter Cardillo, chief market economist at Spartan Capital Securities, the market is feeling relieved in response to this.
“As far as conflict is concerned, that is always a factor of concern for the market. Income is more of a fundamental aspect than geopolitical concerns.”
Netflix shares fell 6.4% in pre-market trading after Netflix's second-quarter forecast was disappointing. Shares of other online video service providers such as Walt Disney and Roku fell 0.7% and 1.2% respectively.
The S&P 500 and Nasdaq closed lower for a fifth straight session on Thursday, as economic data and comments from Fed officials indicated that the US central bank may not cut interest rates anytime soon.
Federal Reserve policymakers have agreed to keep borrowing costs in the market low for now and may continue until the middle of the year. This is due to the slow and tortuous progress of inflation, and the still strong US economy.
Stock markets have been reeling this week as investors readjust their expectations about how much the Fed will cut interest rates this year, with both the S&P 500 and the Dow poised for their third weekly declines, while the Nasdaq is on track for a fourth straight weekly loss. also, if the current trend continues.
Money markets are now pricing in about 39 basis points (bps) of cuts from the central bank this year, down from about 150 bps seen in early 2024, based on LSEG data. US stocks saw an outflow of $4.1 billion in the latest week, according to Bank of America's weekly 'Flow Show' report, their biggest two-week outflow since December 2022.
The CBOE Volatility Index, also known as Wall Street's "fear gauge," was up 0.61 points at 18.61 after breaching a psychologically important level.
