By Investors Hub
Major U.S. index futures are pointing to a higher on Friday as traders digest the results of the election in the U.K. The upward momentum on Wall Street comes even though no party gained a clear majority in the U.K. election, resulting in a hung parliament.
Nonetheless, trading activity may be somewhat subdued on the day as traders look ahead to next week’s Federal Reserve meeting.
CME Group’s FedWatch Tool indicates a 99.6 percent chance that the Fed will raise interest rates by a quarter point next week.
With the Fed widely expected to raise rates, traders will pay close attention to the accompanying statement for clues about future rate hikes.
Stocks showed a lack of direction over the course of the trading session on Thursday as traders kept an eye on developments on Capitol Hill. Despite the choppy trading, the tech-heavy Nasdaq climbed to a new record closing high.
The major averages all closed in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq rose 24.38 points or 0.4 percent to 6,321.76, the Dow edged up 8.84 points or less than 0.1 percent to 21,182.53 and the S&P 500 crept up 0.65 points or less than 0.1 percent to 2,433.79.
The lackluster performance on Wall Street came as traders focused on former FBI Director James Comey’s testimony before the Senate Intelligence Committee.
The questioning of Comey came after his statement released by the committee on Wednesday appeared to confirm some recent reports about his interactions with Trump.
The statement included details of a conversation during which Trump seemed to ask Comey to drop an investigation of former National Security Adviser Michael Flynn’s contact with Russian officials.
“I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go,” Trump said, according to Comey.
Comey told the committee he took the comment from Trump as a directive but said the determination of whether the request amounted to obstruction of justice would be up to Special Counsel Robert Mueller.
However, Trump’s personal attorney Marc Kasowitz rejected many of Comey’s claims, denying the allegation that the president called for an end of the investigation of Flynn.
The European Central Bank announced its latest monetary policy decision earlier in the day, with the ECB leaving its benchmark interest rate unchanged.
The ECB said interest rates are expected to remain at their present levels for an extended period of time but dropped any reference to a future rate cut.
In his subsequent statement, ECB President Mario Draghi lowered the outlook for euro area inflation, citing lower oil prices.
Steel stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Steel Index up by 2.9 percent. Ryerson (RYI) and Olympic Steel (ZEUS) posted standout gains.
The strength among steel stocks came as comments from Commerce Secretary Wilbur Ross suggested the administration is preparing new steel import restrictions.
Considerable strength was also visible among financial stocks, with the Dow Jones Banks Index and the NYSE Arca Broker/Dealer Index climbing by 1.7 percent and 1.4 percent, respectively.
Semiconductor, computer hardware, and internet stocks also saw notable strength, helping to lift the tech-heavy Nasdaq to a new record closing high.
On the other hand, gold stocks showed a substantial move to the downside, dragging the NYSE Arca Gold Bugs Index down by 1.8 percent. The weakness among gold stocks came amid a steep drop by the price of the precious metal.
Adedapo Adesanya