S&P 500 futures edged higher early Friday after President Donald Trump refrained from imposing new reciprocal tariffs.
Futures linked to the broad market index were up 0.16%, while Dow Jones Industrial Average futures gained 41 points. Nasdaq 100 futures rose by 0.1%.
During Thursday’s regular session, the S&P 500 climbed 1.04%, while the tech-heavy Nasdaq Composite advanced 1.5%. The Dow gained 0.77%, reaching its session highs after Trump signed a presidential memorandum on reciprocal tariffs but stopped short of enacting them immediately.
Investors were also encouraged by January’s producer price index, along with Wednesday’s consumer price index report, both of which suggested a softer reading for the personal consumption expenditures (PCE) price index. The PCE price index, the Federal Reserve’s preferred inflation measure, is due later this month.
Despite Thursday’s gains, some analysts believe the market’s positive momentum over the pause in reciprocal tariffs could be short-lived. Steve Halls noted, “The market may face pressure on Friday. There wasn’t enough clear stimulus to justify this late-day move. Investors will likely spend the day figuring out what this all really means.”
For now, the major averages remain on track for weekly gains. The S&P 500 and the Dow are set to rise approximately 1.5% and 0.9%, respectively, while the Nasdaq is up 2.2% week-to-date.
Key Earnings and Data Releases
Biopharma giant Moderna will report earnings Friday before the bell. Traders will also monitor the latest retail sales data for further market direction.
Retail Investor Sentiment at Highest Bearish Level Since November 2023
Retail investor pessimism has surged to its highest level since November 2023, according to a weekly survey by the American Association of Individual Investors (AAII). Bearish sentiment climbed to 47.3% this week, up from 42.9% last week, marking the highest reading since late 2023 when it peaked at 50.3%.
Historically, bearish sentiment averages 31.0%.
Meanwhile, bullish sentiment declined to 28.4%, down from 33.3% last week and marking the lowest reading in a month. Historically, optimism averages 37.5% since the survey began in the mid-1980s. The remaining respondents identified as neutral.
Impact of Tariffs on Economic Outlook
A special question in the AAII survey found that nearly 57.4% of respondents believe tariffs will slow the economy and raise prices. Meanwhile, 20.4% expect tariffs to have a temporary impact but no lasting effect, 12.5% believe tariffs will ultimately strengthen the domestic economy, and around 10% see no impact or expressed no opinion.
Prices and figures quoted were correct at the time of writing.
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