Futures Point Higher as Banks, Chips Extend Rally
S&P 500 futures gain 0.3% as Wall Street looks to end week on upbeat note. Regional bank earnings and industrial production data ahead.
Stocks are set to extend Thursday's gains.
S&P 500 futures rose 0.3% early Friday as investors digest another round of strong financial earnings and look to close out a week that's been choppy but ultimately constructive. Nasdaq 100 futures advanced 0.6%, while Dow futures added 46 points.
The setup: banks keep beating, chips keep rallying, and the economic data supports the soft landing narrative. Whether that momentum carries through the session depends on regional bank results and December industrial production numbers due this morning.
Thursday's Recap
The market bounced Thursday after two consecutive down days. The Dow added 293 points to close at 49,442, a 0.6% gain. The S&P 500 rose 0.26% to 6,944 while the Nasdaq eked out a 0.25% advance to 23,530.
Semiconductors led. TSMC's blowout Q4 earnings sent the entire sector higher—Nvidia gained 2.1%, AMD rose 1.9%, and Applied Materials surged 5.6%. The Philadelphia Semiconductor Index notched another record close.
Banks rallied hard after morning earnings releases. Goldman Sachs jumped 4.6% following its dividend hike announcement, while Morgan Stanley surged 5.8% on record full-year EPS. BlackRock added 2.5% after crossing $14 trillion in assets.
The US-Taiwan chip investment deal provided additional tailwinds, confirming that semiconductor reshoring will accelerate regardless of near-term trade tensions.
What's on Deck
Regional banks report before the open. PNC Financial, State Street, M&T Bank, and Regions Financial all release Q4 results. These names matter for reading credit quality and loan demand outside the money-center banks.
Consensus expectations are constructive. Analysts project PNC earning $4.23 per share, up 12% from last year. State Street's asset servicing fees should reflect strong market levels. The key variable is net interest income guidance—regional banks face more pressure from rate cuts than their larger peers.
December industrial production data hits at 9:15 AM Eastern. Economists expect a modest gain after November's decline. Manufacturing has been the economy's weak link; any upside surprise would reinforce the soft-landing thesis.
Weekly Scorecard
Despite Thursday's rally, the major indexes remain slightly negative for the week. The S&P 500 is down 0.3% through Thursday's close, the Nasdaq has shed 0.6%, and the Dow is off 0.1%.
That's not alarming given the prior week's strong performance. Markets don't move in straight lines, and a modest pullback after pushing to record highs is healthy consolidation rather than trend reversal.
The bigger picture: we're three weeks into 2026 and the S&P 500 sits within 1% of its all-time high. Earnings are beating, inflation is contained, and the Fed appears on hold. That's an environment that rewards buying dips rather than selling rallies.
What Could Derail It
Geopolitical risk remains elevated. The administration's posture toward Iran and Greenland has created uncertainty that investors continue monitoring. Any escalation would test the market's resilience.
Fed independence concerns linger too. The Powell investigation news from earlier this month hasn't fully resolved. Markets have largely shrugged it off, but central bank credibility matters for long-term inflation expectations.
And valuations aren't cheap. The S&P 500 trades at roughly 22 times forward earnings—elevated by historical standards, though justified by strong profit growth. Any disappointment in mega-cap tech earnings later this month could reset expectations.
How to Play It
The path of least resistance points higher in the near term. Bank earnings have exceeded expectations across the board, chip demand remains robust, and economic data supports continued expansion.
That doesn't mean chasing the open. Wait for the regional bank numbers and industrial production release before committing new capital. The market has a habit of fading premarket gains when data disappoints.
For positioning, the sectors working—semiconductors, financials, healthcare—are likely to keep working until something changes. Rotation into laggards like small caps and real estate requires a catalyst that hasn't materialized.
Watch the 6,900 level on the S&P 500 as near-term support. A close above Thursday's high of 6,944 would confirm the uptrend and set up a push toward 7,000 next week.