Source: NYSE Futures were mixed early Friday morning as investors continued to assess earnings reports and tighter language from Federal Reserve speakers. Futures tied to the Dow Jones industrial average fell 34 points, or 0.1%. S&P 500 futures traded almost flat, while Nasdaq-100 futures rose 0.19%. Thursday brought another day of decline for the major indices. The S&P 500 lost 0.31% and the Nasdaq Composite lost 0.35%. Cisco shares rose in regular trading, buoyed by earnings results. Meanwhile, companies posting results after the close such as Gap, Ross Stores and Palo Alto Networks added to the mix of companies that beat expectations. But investors also had to consider comments from more than half of the Fed’s speakers at events across the country. In particular, St. Louis Federal Reserve Bank President James Bullard said on Thursday that “the policy rate is not yet in a zone that can be considered sufficiently restrictive.” He suggested that the appropriate band for the federal funds rate could be in the 5% to 7% range, which is higher than what the market is pricing in. Yields, meanwhile, jumped in tandem, with the politically sensitive yield on the 2-year note rising to 4.45%. That move alarmed investors who worry that rising interest rates could trigger a recession. Investors responded to every new piece of economic data or any language in recent weeks that could indicate what the Fed will do next with interest rates, said Shelby McFaddin, investment analyst at Motley Fool Asset Management. In that case, he said the inflation comments led investors to believe the Fed doesn’t think the economy has cooled enough. “There was absolutely a thirst for relief and a tug-of-war,” he said of the investor response in recent days. “But at the end of the day, it really depends on whether this period of inflation turns deflationary more slowly than it went up and what the Fed decides to do next.” Investors will watch Friday for data on existing home sales for any sign of a cooling economy. Boston Fed President Susan Collins will speak in the morning.
