Futures higher; Netflix earnings; Michigan sentiment ahead - what’s moving markets
Investing.com - U.S. stock futures rise, with investors keeping a close eye on incoming earnings and economic data. Netflix’s (NASDAQ:NFLX) earnings top estimates, but shares in the streaming giant slip as analysts flag that its results may not have lived up to sky-high expectations. Elsewhere, a closely-watched consumer sentiment report is due out, while Bitcoin gains after U.S. House lawmakers pass three bills aimed at establishing a clear legal framework for digital assets.
1. Futures higher
U.S. stock futures ticked higher on Friday, suggesting an extension to gains posted in the prior session that were fueled by investor optimism around upbeat second-quarter earnings and signs of resilient growth conditions despite lingering tariff uncertainty.
By 03:51 ET (07:51 GMT), the Dow futures contract had risen by 64 points, or 0.1%, S&P 500 futures had climbed by 8 points, or 0.1%, and Nasdaq 100 futures had ticked up by 27 points, or 0.1%.
The main averages on Wall Street advanced on Thursday, with investors taking their cues from a series of favorable corporate results, as well as executive commentary that analysts have described as encouraging. Economic data this week has also indicated that U.S. economy is picking up some steam, even as inflationary pressures from President Donald Trump’s aggressive trade agenda appear to be mounting.
Economists have warned that levies could drive up prices and weigh on economic activity, although some doubts remain over the potential extent of the impact of the tariffs.
"[O]ur base case remains that the tariffs ultimately imposed will not cause a recession -- though we expect growth to slow," analysts at Capital Economics said in a note.
2. Netflix earnings
Shares in Netflix inched lower in extended hours trading after the streaming giant’s second-quarter earnings and outlook were solid, but failed to live up to heightened analyst expectations.
Fueled in large part by the success of the final season of its mega-hit series "Squid Game," Netflix posted quarterly diluted per-share profit of $7.19, above estimates of $7.08, according to LSEG data cited by Reuters.
Netflix, which has been pushing to fold in new offerings like live events to bolster viewership and draw in advertisers, also lifted its annual revenue guidance to a range of $44.8 billion to $45.2 billion -- up from $44.5 billion previously.
The company noted that the improved forecast was partly underpinned by a recent weakening in the U.S. dollar, which analysts at Vital Knowledge argued was a "low-quality source."
Investing.com analyst Thomas Monteiro also said the outlook "now feels quite conservative," adding that this is "problematic for a stock priced for perfection." Netflix’s stock price has surged by more than 43% so far this year, undergirded by hopes that the firm will continue to strengthen its position as one of the most dominant players in the streaming sector.
3. Michigan sentiment report ahead
On the economic calendar, investors will likely be keeping tabs on the release of a monthly tracker of consumer sentiment.
The gauge from the University of Michigan is tipped to have inched up in July, with inflation expectations holding roughly steady.
"We’ll see whether 1-year inflation expectations have continued to drop: they are currently at 5%, though opinions diverge sharply between Democrat (very high) and Republican (very low) responders," analysts at ING said in a note.
Friday’s release will come after separate reports this week painted a picture of an American economy that seems to be on solid footing, at least for the moment.
On Thursday, retail sales figures were stronger than anticipated and weekly jobless claims came in below forecasts. Inflation also stayed just about in line with expectations in June, although tariffs seem to be pushing the prices of some goods higher.
4. Fed’s Waller on rates
With this economic backdrop in mind, the Federal Reserve has largely adopted a "wait-and-see" attitude to future interest rate decisions.
However, Fed Governor Christopher Waller said on Thursday that a rate cut as soon as the central bank’s next meeting this month is justified, citing rising risks to the economy.
He added that the tariff-induced uptick in inflation will likely not be a persistent feature of the economy, but rather a more temporary bump.
"It makes sense to cut" the Federal Open Market Committee’s policy rate by a quarter of a percentage point at the Fed’s July 29-30 gathering, Waller said at an event.
The comments come as Fed Chair Jerome Powell has faced intensifying pressure from Trump to quickly slash borrowing costs to help bolster the economy. Powell, who has stressed the Fed’s independence from the White House, has defended a more cautious approach that will allow policymakers to assess the wider effects of Trump’s tariffs.
5. Bitcoin higher after U.S. House passes key crypto bills
Bitcoin temporarily rose above $120,000 in Asian trade on Friday, heading for its fourth consecutive weekly gain, as the U.S. House of Representatives cleared three bills aimed at creating a new regulatory framework for cryptocurrencies.
The world’s largest cryptocurrency last traded 1.1% higher at $119,583.3 as of 03:52 ET.
The token had surged to record highs above $123,000 at the start of the week. But profit taking at record levels and concerns around the final passage of crypto bills tempered gains.
One of the bills, known as the the "GENIUS Act," sailed through the House with a bipartisan 308-122 vote. It requires stablecoin issuers to hold high‑quality, dollar‑equivalent reserves and undergo regular audits, while establishing both federal and state supervision
Two additional bills also passed the House. The CLARITY Act aims to define whether digital tokens fall under the jurisdiction of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). Meanwhile, the Anti-CBDC Surveillance State Act, prohibits the Federal Reserve from issuing a central bank digital currency without explicit approval from Congress.
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