Dow futures rise 145 pts; Michigan sentiment data, Twitter news in focus

Investing.com -- U.S. stocks are seen opening higher Friday on growing optimism that the Federal Reserve may pause its monetary tightening campaign, although concerns about a potential recession remain, along with worries about the debt ceiling and the banking sector.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 145 points, or 0.4%, S&P 500 Futures traded 15 points, or 0.5%, higher and Nasdaq 100 Futures climbed 28 points, or 0.2%.

The blue-chip Dow Jones Industrial Average closed over 200 points, or 0.7%, lower Thursday, recording a fourth straight losing session, on renewed concerns about deposit outflows in the regional banking sector after PacWest Bancorp (NASDAQ:PACW) announced its deposits had shrunk by about 10% in the first week of May.

The tech-heavy Nasdaq Composite gained 0.2%, while the broad-based S&P 500 fell 0.2%.

Data released Thursday showed that producer price growth in the U.S. eased to its slowest level in over two years, while jobless claims rose to their highest mark since October 2021.

These signs of a slowing economy have resulted in growing expectations that Fed policymakers could bring the era of aggressive interest rate hikes to an end at its next policy meeting in June.

Influential investment bank Goldman Sachs assigns just a 35% chance that the U.S. will enter a recession this year, but acknowledges this could change if the regional banking turmoil or a different shock (e.g. debt limit) pushes the economy into recession.

A meeting between major lawmakers - that is, U.S. President Joe Biden, House Speaker Kevin McCarthy and several other top Congressional names - to discuss the debt ceiling that was originally set for today has been postponed.

Treasury Secretary Janet Yellen said Friday there was still uncertainty about exactly when the Treasury would run out of cash, which could come as early as June 1.

Economic data this session centers around the release of the University of Michigan consumer sentiment index, while Fed. Governor Philip Jefferson is scheduled to speak.

In the corporate sector, Tesla (NASDAQ:TSLA) stock rose in premarket trading after CEO Elon Musk tweeted on Thursday that he had "hired a new CEO for X/Twitter", a move that would allow him to concentrate more on running the EV manufacturer.

Oil prices edged higher Friday, but are still on course for four consecutive weeks of declines on worries that the U.S. economy is heading towards recession coupled with lingering fears over a slow recovery in China's fuel demand.

Speculation that the U.S. could repurchase oil for its heavily-depleted Strategic Petroleum Reserve as prices trade around $70 a barrel is providing a degree of support.

By 07:00 ET, U.S. crude futures traded 0.4% higher at $71.11 a barrel, while the Brent contract climbed 0.2% to $75.15. Both benchmarks are currently set to drop around 0.5% this week.

Additionally, gold futures were down 0.5% to $2,010.80/oz, while EUR/USD traded 0.1% lower at 1.0908.