Stock Futures Are Recovering but the Bond Market Has Not Backed Down
December E-mini S&P 500 Index futures are trying to recover from Thursday’s break. December E-mini Nasdaq-100 Index futures are holding closer to their recent high. The 10-year Treasury yield reached 5.23% late Thursday, the highest since 2007. Yields are little changed Friday morning. The Dow is headed for a fourth consecutive losing week while the Nasdaq-100 is up 1.6%. That is concentration, not broad strength, and the bond market is not giving either side a reason to change the argument.
At 10:59 GMT, December E-mini S&P 500 Index futures are trading 7,787.50, up 20.50 or 0.26%. The session high is 7,792.50 and the low is 7,748.50. December E-mini Nasdaq-100 Index futures are trading 30,925.25, up 158.50 or 0.52%. The session high is 30,963.25 and the low is 30,679.00.
The Rate Trade Repriced All Week and Nobody Pushed Back
Federal Reserve Governor Michael Barr’s hawkish comments, elevated energy prices tied to the Iran war, and this week’s PMI reports from S&P Global pushed the 10-year to 5.23% and the 30-year to 5.50% by Thursday night.
Fed funds futures are carrying about a 68% chance of another rate hike in October. The two-year reached its highest since 2023 earlier in the week.
The 30-year fixed mortgage rate climbed to 7.45%, the highest since 2024. Morgan Stanley expects higher borrowing costs to weigh on spending and contribute to slower real consumption growth next year. Crude remains elevated with the Iran story unresolved. Every input this week pointed the same direction and the bond market moved on all of them together.
Durable-goods orders and the University of Michigan consumer-sentiment report are Friday’s data. The rate trade has been responding to strong numbers all week.
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See all NASDAQ 100 forecastsA Record Share of S&P 500 Stocks Are Trading Against the Index
A record 45% of S&P 500 constituents now have a negative three-month beta to the index. That is more than double the level during the 2000 dot-com collapse. The top eight stocks carry a beta of 1.23. The other 492 average 0.87.
UBS warned that markets are increasingly reliant on AI capital spending to carry growth. The investment cycle is still supporting earnings expectations. It also leaves the market exposed if spending slows. Thursday’s Oracle force majeure report on the New Mexico data-center project landed right on that question.
The Dow is losing ground for a fourth straight week. Rate-sensitive names are taking the selling. The mega-cap trade is holding the index together and the beta data says it has never been this concentrated.
Nasdaq Futures Are Leading Friday’s Recovery
December E-mini Nasdaq-100 Index futures bounced from 30,370.00 Thursday and are holding the recovery Friday. The contract is up 1.6% for the week. December E-mini S&P 500 Index futures tested the 50-day moving average Thursday and recovered. The cash session finished nearly flat in both the S&P 500 Index and Nasdaq Composite Index while the Dow closed lower.
The buying pressure Thursday was enough to keep the indices from breaking. Friday is testing whether that hold was real or whether it was a pause before the bond market presses again.
Daily December E-mini S&P 500 Index Futures Technical Analysis
December E-mini S&P 500 Index futures are edging higher early Friday after a successful test of the 50-day moving average at 7,720.29 and the minor retracement zone at 7,711.75 to 7,679.50 the previous session.
The new minor range is 7,707.25 to 7,848.50. The contract is currently testing its retracement zone at 7,778.00 to 7,794.50. Trader reaction to this area is likely to set the tone Friday. A sustained move over 7,794.50 could signal the presence of buyers and extend the rally into the pair of tops at 7,848.50 and 7,850.75.
Taking out those tops would reaffirm the uptrend and put 7,904.00 in play. The main trend will change to down if 7,575.00 fails to hold. A sustained move under 7,778.00 would weaken the current recovery and put the 50-day moving average back on the chart.
Daily December E-mini Nasdaq-100 Index Futures Technical Analysis
December E-mini Nasdaq-100 Index futures are marginally higher early Friday after Thursday’s strong technical bounce from 30,370.00. The main trend is up. The rally is testing the minor retracement zone at 30,732.50 to 30,818.00.
A sustained move over 30,818.00 could extend the rally into the 31,094.75 main top, the last resistance before the all-time high at 31,336.75. The upside structure remains intact as long as buyers keep defending the lower end of the retracement zone.
A failure to hold 30,732.50 would weaken the outlook and could trigger a retest of the 30,370.00 minor bottom. Below that, the next support zone is 30,074.00 to 29,833.00, followed by the 50-day moving average at 29,661.13.
What to Watch
Durable-goods orders and Michigan consumer sentiment are the data risk Friday. Strong numbers keep October hike odds near 68%. The bond market cooled overnight without reversing. Yields are off Thursday’s highs and holding.
December E-mini Nasdaq-100 Index futures are showing the stronger recovery after Thursday’s bounce from 30,370.00. December E-mini S&P 500 Index futures held the 50-day and are testing the 7,778.00 to 7,794.50 retracement zone. The data Friday either gives the bond market another reason to press or gives futures room to work on the resistance levels above.
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