U.S. stocks open higher, with S&P 500 eyeing fresh record as tech leads market

What’s driving markets

After the S&P 500 finished Thursday just 0.3% off its record close of 4,796.56, reached Jan. 3, 2022, the index advanced at the open on Friday, putting it within striking distance of a fresh record close.

Tech stocks are giving the market a boost once again on Friday, continuing their outperformance from earlier this week, as the Nasdaq has outperformed. Better-than-expected results from chip-making giant Taiwan Semiconductor Manufacturing Co.
TSM,
-0.27%
on Thursday helped drive a powerful session for the Nasdaq Composite.

TSMC’s cheer also aided in erasing 2024 losses for the S&P 500 and Nasdaq. Still, the Nasdaq is the only major index poised for a weekly win, up 0.5% versus a 0.3% drop for Dow industrials and little change for the S&P 500, according to FactSet.

TSCM shares soared in Taiwan on Friday following that strong day for U.S.-listed shares.

“Reflation trade is not happening. long technology is the most crowded trade of the moment,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note to clients.

“The Nasdaq-100 net long positions are at the highest levels in nearly two years. The stretched long positioning makes Nasdaq stocks vulnerable to selloff, but the softening Fed expectations and robust AI-demand should keep the technology space well-funded,” she said.

Markets entered 2024 with expectations for six or seven interest-rate cuts by the Federal Reserve. Those expectations have seen pushback, especially given strong economic data, such as retail-sales data, reported earlier this week.

As for Friday’s data, preliminary consumer sentiment for January and existing-home sales for December are due at 10 a.m. Eastern time.

A number of Federal Reserve officials are speaking publicly on Friday, including Chicago Fed President Austan Goolsbee, who sat for an interview on CNBC at 8:30 a.m.

Goolsbee declined to say when he thinks the Fed will start cutting interest rates. But he did say reductions could be expected this year “if we continue to make surprising progress on inflation.”

“We don’t want to commit ourselves before the job is done,” Goolsbee said. But “as inflation comes down, that opens the door to a reduction in restrictiveness.”

See: Goolsbee says it’s too soon to determine when Fed will cut interest rates

Fed Vice Chair for Supervision Michael Barr will speak at 1 p.m. Friday and San Francisco Fed President Mary Daly will speak at at 4:15 p.m. Eastern time.

Several companies will report earnings, including Schlumberger Ltd.
SLB,
+3.01%,
Travelers Cos.
TRV,
+4.91%,
Fifth Third Bancorp
FITB,
+1.77%,
State Street Corp.
STT,
+4.63%
and Comerica Inc.
CMA,
-0.57%.

Companies in focus

• Shares of Wayfair Inc.
  W,
  +8.04%
  rose sharply after the company announced another round of layoffs.

• Super Micro Computer Inc.
  SMCI,
  +22.97%,
  a manufacturer of computer products, saw its shares shoot higher after the company released a sales outlook that was far stronger than Wall Street had expected.  

• Nvidia Corp.
  NVDA,
  +0.93%
  and Broadcom Inc.
  AVGO,
  +2.66%
  shares were up strongly in early trading amid widespread optimism in the chips space.

• Shares of Roomba maker iRobot
  IRBT,
  -30.31%
   sank on Friday following reports that European antitrust regulators planned to block a planned buyout by Amazon.com Inc.