Market Snapshot: Stock-index futures mostly higher; Dow on track to erase 2020 loss

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Stock-index futures traded mostly higher Friday, with the Dow Jones Industrial Average on track to turn positive for the year to date, as investors look for data on U.S. consumer spending a day after the Federal Reserve announced a policy shift that would allow employment and inflation run hotter than in the past.

What are major benchmarks doing?

Futures on the Dow Jones Industrial Average YM00, +0.47% rose 135 points, or 0.5%, to 28,603, while S&P 500 futures ES00, +0.32% gained 11.70 points, or 0.3%, to trade at 3,497. Nasdaq-100 futures NQ00, +0.10% were up 5.75 points, or 0.1%, at 11,958.50.

On Thursday, the Dow DJIA, +0.56% rose 160.35 points, or 0.6%, to close at 28,492.27, ltheaving the blue-chip gauge down less than 0.2% for the year to date. The S&P 500 SPX, +0.16% ended with a gain of 5.82 points, or 0.2%, at 3,484.55, a record close. The Nasdaq COMP, -0.34%, which closed at a record on Wednesday, fell 39.72 points, or 0.3%, to close at 11,625.34.

What’s driving the market?

Stocks put in a choppy performance Thursday after Federal Reserve Chairman Jerome Powell announced, in an appearance at the annual Jackson Hole monetary symposium, that the Fed was shifting to a policy of average inflation targeting which would effectively see policy makers end the practice of preemptively hiking interest rates to stave off inflation. Instead, the Fed would allow inflation to run above its 2% target to make up for periods when inflation runs below it — signaling that a long period of ultralow interest rates lies ahead.

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“Markets haven’t got overexcited by the U.S. Federal Reserve’s new stance on letting inflation run higher, despite it implying that interest rates will stay lower for longer — normally something that would benefit equities. One could argue that the Fed following this path was already expected by the market, hence why stocks haven’t surged ahead,” said Russ Mould, investment director at AJ Bell.

In Asia, Japanese shares fell sharply, leaving the Nikkei 225 Index NIK, -1.40% down 1.4% after Prime Minister Shinzo Abe said he would resign due to illness. Abe, whose term ends in September 2021, is expected to remain in office until a new party leader is elected and formally approved by parliament.

The U.S. economic calendar features data on personal income and spending for July at 8:30 a.m. Eastern. Economists surveyed by MarketWatch expect income to fall another 0.4% after a 1.1% drop in June. Spending is expected to show a 1.6% rise after a 5.6% increase in June. A core inflation measure is expected to rise by 0.5%.

Data on trade in goods for July is also due at 8:30 a.m. Eastern, and is forecast to show a widening trade deficit of $71.5 billion versus $70.6 billion in June. A final reading of the University of Michigan’s August consumer sentiment index is set for 10 a.m. Eastern.

Which companies are in focus?
What are other markets doing?

The Shanghai Composite SHCOMP, +1.60% rose 1.6% and the Hong Kong’s Hang Seng Index HSI, +0.55% gained 0.6%. 

The Stoxx Europe 600 SXXP, -0.22% was off 0.2%, while U.K.’s FTSE 100 benchmark UKX, -0.04% was up 0.1%. 

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.745% TMUBMUSD10Y, 0.745% was up 0.6 basis point at 0.752%. Bond prices move inversely to yields.

Gold futures GCZ20, +1.88% were up 1.7% at $1,966.40 an ounce. U.S. oil futures CL.1, -0.02% were up 0.1% at $43.07 a barrel.

The ICE U.S. Dollar Index DXY, -0.77%, which tracks the currency versus a basket of six major rivals,