Dow futures rise as post-Fed rally continues; flash PMI due

Investing.com -- U.S. stock futures climbed higher Friday, continuing the post-Fed rally on optimism that the U.S. central bank will be able to engineer a soft landing next year, curbing inflation without sending the economy into recession.

By 06:30 ET (11:30 GMT), the Dow Futures contract was up 115 points, or 0.3%, S&P 500 Futures traded 15 points, or 0.3%, higher and Nasdaq 100 Futures climbed 60 points, or 0.4%.

The main Wall Street indices all finished in the green in the prior session, with all three on pace for their seventh-consecutive positive week - which would be their best weekly winning streak since 2019.

The blue chip Dow Jones Industrial Average gained over 150 points, or 0.4%, posting its second straight all-time closing high, while the broad-based S&P 500 gained 0.3% and the tech heavy Nasdaq Composite 0.2%.

Fed stance breeds soft landing optimism

This positivity has been boosted by the Federal Reserve signaling that it would start to cut interest rates from more than two-decade highs next year. Stronger-than-anticipated retail sales data on Thursday, along with cooling annual inflation figures earlier in the week, have also buoyed hopes that the U.S. economy will recover strongly in 2024.

HSBC now expects the S&P 500 to end 2024 at 5,000, roughly representing a 6% gain for the benchmark index from Thursday's closing level, with the potential for at least a 20% return from now through the six months following the first rate cut, which the firm expects in the third quarter of 2024.

There is more economic data to study Friday, including November industrial and manufacturing production, but most eyes will be on the S&P Global Composite Flash PMI data for December, due after the opening bell.

The equivalent data in the eurozone, released earlier Friday, showed that the downturn in business activity surprisingly deepened in December, indicating the bloc's economy is almost certainly in recession.

Costco benefits from demand for cheaper goods

In corporate news, Costco Wholesale (NASDAQ: COST) stock rose in premarket trading after the membership-only retailer posted quarterly sales and profit that beat projections after the close Thursday, helped by demand for cheaper groceries.

Costco has moved to keep prices low in a bid to entice budget-conscious shoppers wary of overspending during a time of elevated inflation and interest rates.

Crude on course for weekly gain

Oil prices edged higher Friday, on course for the first weekly gain in two months, boosted by increased optimism over demand growth next year as well as a weaker dollar.

By 06:30 ET, the U.S. crude futures traded 0.5% higher at $71.90 a barrel, while the Brent contract climbed 0.4% to $76.88 a barrel.

Both benchmarks are on track for gains of around 1% this week, breaking a run of seven consecutive losing weeks.

The dollar fell to a four-month low on Thursday after the Federal Reserve signaled lower borrowing costs next year, helping confidence that a stronger U.S. economy will boost crude demand in 2024.

The International Energy Agency added to this belief by lifting its oil demand forecast for 2024, citing an improvement in the outlook for U.S. demand and lower oil prices.

A weak dollar also makes dollar-denominated oil cheaper for foreign purchasers.

Additionally, gold futures rose 0.5% to $2,055.35/oz, while EUR/USD traded 0.3% lower at 1.0959.

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