Dow futures edge higher at end of positive year

Investing.com -- U.S. stock futures edged higher Friday, looking set to end a strong year on a positive note.

By 06:35 ET (11:35 GMT), the Dow Futures contract was up 38 points, or 0.1%, S&P 500 Futures traded 6 points, or 0.1%, higher and Nasdaq 100 Futures climbed 28 points, or 0.2%.

The three main indices have benefited from an impressive late rally, boosted by the Federal Reserve signaling that its prolonged rate-hiking cycle is at an end and rate cuts were likely in 2024.

The Dow Jones Industrial Average and S&P 500 are poised to end 2023 over 13% and 24% higher, respectively, with the latter less than 0.5% off its highest closing level, which was set in January 2022. The Nasdaq Composite is on course to record a gain of over 44%, which would be its biggest annual increase since 2003.

Next week’s payrolls loom large

Investors are widely expecting the Fed to cut interest rates in the first quarter of 2024 as inflation has eased and economic growth has cooled. That said, the economy has shown little evidence that months of tighter monetary policy will result in a severe downturn, raising hope for the so-called ‘soft landing’.    

Key to whether this mindset will continue will be the health of the U.S. jobs market into the new year.

Data released on Thursday showed that the number of Americans filing initial claims for unemployment benefits rose by 12,000 last week to 218,000. 

Focus now turns to next week’s December nonfarm payrolls report, with the U.S. economy expected to have added 158,000 jobs in December versus 199,000 in November. 

Nvidia launches new gaming chip 

In the corporate sector, Nvidia (NASDAQ:NVDA) stock edged higher in premarket trading after the U.S. chipmaker launched a new version of a gaming chip designed to comply with U.S. export controls targeting China.

Boeing (NYSE:BA) also rose after the U.S. plane manufacturer confirmed that all of its 737 MAX jets operated by Chinese carriers are now back in service, following the global grounding in 2019.

Oil prices set for hefty annual fall 

Oil prices edged higher Friday, rebounding after the previous session’s sharp losses, but were set to end the year near the lowest levels since 2020 when the pandemic sent prices spiralling lower.

By 06:35 ET, the U.S. crude futures traded 0.4% higher at $72.06 a barrel, while the Brent contract climbed 0.6% to $77.58 per barrel. 

Prices dropped around 3% on Thursday as major shipping firms began returning to the Red Sea, easing concerns about supply disruptions through this key region.

Helping the prices recover was the U.S. Energy Information Administration reporting a much larger-than-expected draw in crude inventories, with stockpiles dropping by 7.1 million barrels in the week ended Dec. 22.

That said, the crude benchmarks are on course to end the year around 10% lower as production cuts by a number of major producers have proved insufficient to prop up prices, with the slowing global economy and a series of aggressive interest rate hikes to combat soaring inflation weighing.

Additionally, gold futures fell 0.2% to $2,076.95/oz, while EUR/USD traded 0.1% higher at 1.1074.