US Stocks Likely To Open Higher Following A Sell-Off, 'This Choppy Start To 2025 Isn't Abnormal. Don't Panic,' Says Expert Highlighting Seasonal Weakness In The First Quarter After Elections

U.S. stock futures rose on Friday following Thursday’s sell-off. Futures of all benchmark indices advanced in premarket trading, except the small-cap gauge Russell 2000.

Nvidia Corp. NVDA fell over 8% on Thursday, dragging the tech-heavy Nasdaq 100 down despite the strong quarter as its gross margins fell sequentially, caused by the ramp-up in the production of its Blackwell chips.

Meanwhile, President Donald Trump escalated tariff threats against Mexico and Canada, saying that it will go into effect as scheduled on March 4, in a social media post. He further threatened additional tariffs on China, following his pledge to impose 25% tariffs on the EU.

Investors await Friday’s personal consumption expenditure inflation data amid uncertainty over interest rate cuts as it is the Federal Reserve’s preferred inflation gauge.

The 10-year Treasury yield stood at 4.25%, while the two-year yield was at 4.05%. According to the CME Group’s FedWatch tool, there is a 94.5% chance that the Federal Reserve will keep interest rates unchanged for the March meeting.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Friday. SPY was up 0.35% to $587.09, and QQQ advanced 0.28% to $501.67, according to Benzinga Pro data.

Cues From The Last Session

Most sectors in the S&P 500 ended lower Thursday, with technology and communication services leading the decline. However, financial and energy stocks bucked the trend.

The Nasdaq Composite dropped over 500 points, dragged down by Nvidia’s 8% plunge after its Q4 earnings.

Dell Technologies Inc. DELL declined after missing revenue estimates, whereas, SoundHound AI Inc. SOUN rose in after-hours after beating analyst expectations. Rocket Lab USA Inc. RKLB shares dropped after a weak first-quarter guidance.

Economic data showed a slight upward revision to fourth quarter GDP according to its second reading released on Thursday. Also, initial jobless claims rose by 22,000 from the previous week to 242,000, the most in over two months and above market expectations of 221,000.

Insights From Analysts

Ryan Detrick, the chief market strategist at Carson Research highlighted that the first quarter of a post-election year tends to be “quite weak”. “This choppy start to 2025 isn’t abnormal. Don’t panic,” he added.

He also continued reiterating his February seasonality stance via his X posts. He highlighted that junk corporate bonds, also called high-yield bonds, were up the past five days as the S&P 500 was down over 4%.

“If the end was near like they keep telling us this wouldn’t be the case. Remain calm, this is simply seasonal late February shenanigans,” he said.

Furthermore, he dismissed the validity of price-to-earnings ratio, saying that there was no “correlation between P/E multiples and what stocks will do a year later.”

George Smith, portfolio strategist at LPL Financial highlighted his take on investor sentiment by analyzing survey data from the American Association of Individual Investors and Bank of America Global Fund Manager Survey.

AAII’s latest sentiment survey reveals significantly bearish sentiment among individual investors for the fourth consecutive week, with the bull-bear spread at a 10-year high. This extreme bearishness, viewed through a contrarian lens, could be a positive signal for stocks, said Smith.

However, the BofA Global Fund Manager Survey presents a more mixed picture, with professional investors cautiously optimistic about the economy but concerned about overvalued U.S. equities. Overall, these surveys suggest a relatively neutral market outlook, aligning with LPL Research’s neutral stance on equities due to a balance of positive and negative factors, explained Smith.

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep on Friday:

• January’s personal income, spending, core and headline PCE index, advanced U.S. trade balance in goods, retail and wholesale inventories will be out by 8:30 a.m., ET.

• Richmond Fed President Tom Barkin will speak at 8:30 a.m., ET as well.

• February’s Chicago business barometer data will be released at 9:45 a.m., ET.

• Chicago Fed President Austan Goolsbee will speak at 10:15 p.m., ET.

Stocks In Focus:

• Owens & Minor Inc. OMI rose 0.78% in the premarket on Friday ahead of its earnings, which will be released before the opening bell. Analysts expect it to report earnings of 52 cents per share on the revenue of $2.69 billion.

• Chart Industries Inc. GTLS declined 0.14% as Wall Street expects it to report quarterly earnings of $3.15 per share on revenue of $1.17 billion before the opening bell.

• Integral Ad Science Holding Corp. IAS fell 1.55% ahead of its earnings, which will be released before the opening bell. Analysts expect it to report earnings of 25 cents per share on the revenue of $148.83 million.

• HP Inc. HPQ was 3.41% lower despite meeting EPS and revenue estimates as it guided for lower than expected second-quarter adjusted EPS between 75 to 85 cents.

• Dell Technologies Inc. DELL dropped 2.06% as it missed the revenue expectations amid a mixed quarter.

• SoundHound AI Inc. SOUN jumped 5.86% after posting a strong quarter and issuing a positive guidance for the next fiscal year.

• Rocket Lab USA Inc. RKLB slumped 10.99% as it reported a weaker than expected first quarter guidance.

• Rapid Micro Biosystems Inc. RPID climbed 40.48% as it signed a 5-year global distribution deal with MilliporeSigma.

• Virpax Pharmaceuticals Inc. VRPX surged 39.04% as it reported positive human study results for its Molecular Envelope Technology, a key component in its Envelta and NobrXiol products, with no moderate to severe adverse events.

• Powell Max Ltd. PMAX zoomed 77.05% as it announced that it will acquire Miracle Media Production from Vision Access Enterprises and M Digital Partners Company. The acquisition is expected to enhance Powell Max’s services and create synergies.

Commodities, Gold And Global Equity Markets:

Crude oil futures were trading lower in the early New York session by 1.11% to hover around $69.57 per barrel.

The gold spot index was down by 0.53% to $2,861.73 per ounce. Its last record high was at $2,956.37. The Dollar Index was up 0.12% at the 107.373 level.

Asian markets fell on Friday, including Japan’s Nikkei 225, China’s CSI 300, Australia’s ASX 200, India’s S&P BSE Sensex, South Korea’s Kospi, and Hong Kong’s Hang Seng index. European markets were also mostly lower in trade.

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