U.S. Stock Futures Hover After S&P 500 Hits Record

U.S. stock futures were little changed a day after the S&P 500 nudged up to a fresh record as investors weighed rising inflation against evidence of a healing labor market.

S&P 500 futures traded mostly flat and futures on the Dow Jones Industrial Average traded flat. Changes in equity futures don't necessarily predict movements after the markets open.

In Europe, the Stoxx Europe 600 gained 0.3% in morning trade, and it is at its highest level in a year as gains in healthcare and communication services sectors were muted by losses in financials and real-estate sectors.

The U.K.'s FTSE 100 added 0.5%. Other stock indexes in Europe mostly gained as France's CAC 40 rose 0.3% and the U.K.'s FTSE 250 climbed 0.3%, while Germany's DAX was flat.

The British pound depreciated 0.1% against the U.S. dollar, with 1 pound buying $1.42 whereas the Swiss franc and the euro strengthened 0.1% against the dollar.

In commodities, international benchmark Brent crude was up 0.1% to $72.60 a barrel. Gold also gained 0.5% to $ 1,905.10 a troy ounce.

The yield on German 10-year bunds declined to minus 0.274% and 10-year U.K. government debt known as gilts yields were down to 0.704%. 10-year U.S. Treasury yields slipped to 1.436% from 1.458%. Yields move in the opposite direction from prices.

Indexes in Asia were mixed as Hong Kong's Hang Seng added 0.6%, whereas Japan's Nikkei 225 index was broadly flat and China's benchmark Shanghai Composite was lower 0.6%.

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U.S. stock futures wobbled Friday, pointing to the S&P 500 hovering near its all-time high after its third straight week of gains.

Futures tied to the S&P 500 wavered between gains and losses. The market benchmark notched a record high Thursday. Dow Jones Industrial Average futures edged up less than 0.1% Friday, suggesting that the blue-chips index will end the week lower.

Contracts tied to the Nasdaq-100 were flat Friday, indicating muted moves in large technology stocks at the market open. Still, the gauge is poised to close out a fourth week of gains.

The major indexes are hovering close to all-time highs, leaving investors looking for any catalysts that may propel the next leg in what has been a sharp rally since the March 2020 rout. Fresh spending plans by the Biden administration that could result in higher taxes, as well as stocks' high valuations and the emergence of new Covid-19 variants, are making people more cautious. Money managers are also weighing whether the rise in inflation is likely to be transitory.

"We're still positive on the outlook, but we're not as optimistic as we were three months ago," said Daniel Morris, chief market strategist at BNP Paribas Asset Management. "The market needs to take a breather and let earnings catch up to where prices are."

In bond markets, the yield on the 10-year Treasury note ticked down for a fourth consecutive day to 1.443%, from 1.458% Thursday, which was its lowest since March 2. Yields fall when prices rise, and have been dragged down in recent days by tepid economic data and high demand from investors both in the U.S. and elsewhere.

The Labor Department on Thursday said the U.S. economic rebound is driving the biggest surge in inflation in nearly 13 years, with consumer prices rising in May by 5% from a year ago. Investors have been concerned for some weeks that a sharp and sustained rise in inflation may prompt the Fed to weigh ending its easy money policies in coming quarters. More recently, the market's inflation expectations have abated, but it remains a focus point for many people.

"Inflation clearly is the big risk out there," said Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald. "Some of the teeth have been softened over the last 24 hours, but there is still the risk that the Fed comes out and says maybe this is more sustained, and that changes the narrative, so central banks are still very much a thing to watch."

Investors will get fresh data indicating whether Americans' outlook for the economy has improved when the University of Michigan's preliminary index of consumer sentiment for this month is released at 10 a.m. ET.

Overseas, the pan-continental Stoxx Europe 600 rose 0.3% after closing Thursday at an all-time high.

Major stock indexes in Asia closed on a mixed note. The Shanghai Composite Index declined 0.6%. South Korea's Kospi Index rose 0.8%, while Hong Kong's Hang Seng Index added almost 0.4%.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

By Caitlin Ostroff

U.S. stock futures edged higher Friday, pointing to the S&P 500 notching a fresh record following three straight week of gains.

Futures tied to the S&P 500 ticked up 0.2% a day after the market benchmark closed at an all-time high. Dow Jones Industrial Average futures also advanced 0.2% Friday.

Contracts tied to the Nasdaq-100 gained 0.2% Friday, suggesting a muted advance in large technology stocks at the market open. The gauge is on track to close out a fourth week of gains.

The major indexes are hovering close to all-time highs, leaving investors looking for any catalysts that may propel the next leg in what has been a sharp rally since the March 2020 rout. Fresh spending plans by the Biden administration that could result in higher taxes, as well as stocks' high valuations and the emergence of new Covid-19 variants, are making people more cautious. Money managers are also weighing whether the rise in inflation is likely to be transitory.

"We're still positive on the outlook, but we're not as optimistic as we were three months ago," said Daniel Morris, chief market strategist at BNP Paribas Asset Management. "The market needs to take a breather and let earnings catch up to where prices are."

In bond markets, the yield on the 10-year Treasury note ticked down for a fourth consecutive day to 1.440%, from 1.458% Thursday, which was its lowest since March 2. Yields fall when prices rise, and have been dragged down in recent days by tepid economic data and high demand from investors both in the U.S. and elsewhere.

The Labor Department on Thursday said the U.S. economic rebound is driving the biggest surge in inflation in nearly 13 years, with consumer prices rising in May by 5% from a year ago. Investors have been concerned for some weeks that a sharp and sustained rise in inflation may prompt the Fed to weigh ending its easy money policies in coming quarters. More recently, the market's inflation expectations have abated, but it remains a focus point for many people.

"Inflation clearly is the big risk out there," said Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald. "Some of the teeth have been softened over the last 24 hours, but there is still the risk that the Fed comes out and says maybe this is more sustained, and that changes the narrative, so central banks are still very much a thing to watch."

Investors will get fresh data indicating whether Americans' outlook for the economy has improved when the University of Michigan's preliminary index of consumer sentiment for this month is released at 10 a.m. ET.

Overseas, the pan-continental Stoxx Europe 600 rose 0.5% after closing Thursday at an all-time high.

Major stock indexes in Asia closed on a mixed note. The Shanghai Composite Index declined 0.6%. South Korea's Kospi Index rose 0.8%, while Hong Kong's Hang Seng Index added almost 0.4%.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com


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  06-11-21 0354ET
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