On Friday, U.S. stock index futures increased as indications of sluggish economic growth and declining commodity prices reduced speculation about the extent to which the Federal Reserve will raise interest rates to contain inflation. Financial markets have been roiled this month by concerns that aggressive tightening by major central banks could trigger a dramatic economic slump, leading the benchmark S&P 500 to confirm a bear market or a 20 percent decline from its most recent top.

Data released on Thursday revealed that U.S. corporate activity slowed significantly in June, prompting investors to reduce their wagers on when interest rates will rise and forward their predictions for when rates will be slashed. By next March, according to the money markets, U.S. interest rates will have reached their peak, which is far lower than the little over 4% that was anticipated for June 2023 before last Wednesday’s Fed meeting. 

Jerome Powell, the chair of the Fed, stated to legislators on Thursday that the Fed’s commitment to taming the country’s 40-year-high inflation is “unconditional.” Powell had earlier said that the Fed was not seeking to spark a recession, but that one was “certainly a possibility.”

The major stock indices appeared poised to post their first weekly gain in four weeks, with sectors including healthcare, real estate, and utilities that are viewed as safer investments during economic turbulence outperforming other markets thus far this week. In premarket trading, large-cap equities including Apple Inc. and Tesla, increased by approximately 1%. As future earnings are valued more heavily for mega-cap growth corporations, rising interest rates have impacted their stock prices. At 06:58 a.m. ET, the Nasdaq 100 e-minis were up 104.5 points, or 0.89 percent, while the S&P 500 e-minis were up 26.75 points, or 0.7 percent. The Dow was up 187 points, or 0.61 percent, at the same time. FedEx Corp increased 3.4 percent after announcing a stronger-than-anticipated full-year profit outlook amid a slowing worldwide shipping demand.

After the Federal Reserve’s yearly “stress test” exercise revealed that the lenders have enough capital to weather a severe economic collapse, bank stocks were mixed.

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