US stock futures pointed to a higher open on Friday, with the Nasdaq 100 leading gains as a pullback in oil prices helped calm inflation worries that had rattled markets earlier in the week. Nasdaq 100 futures advanced roughly 137 points, or 0.6%, while S&P 500 futures gained about 0.3% and Dow futures edged up 0.2%.
The move follows Thursday's rebound, when the Nasdaq climbed 1.7% and the S&P 500 rose 1.1% after investors digested the Federal Reserve's first rate increase in over three years. Brent crude fell toward $102.60 a barrel, and WTI slipped below $100, providing some relief to longer-dated Treasury yields.
Bank of Japan hikes rates, yen reaction matters
The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest since 1995, in a bid to keep underlying inflation from exceeding its 2% target. The decision passed with a 7-2 vote, but the yen weakened rather than strengthened, falling toward 158 per dollar as investors focused on the dissenting votes and Governor Kazuo Ueda's cautious tone on future tightening.
That reaction has implications for Wall Street. Japanese investors hold about $2.5 trillion in US stocks, bonds, and other securities. As domestic yields rise, some of that capital could become more attractive to bring home, potentially reducing demand for US assets and putting upward pressure on Treasury yields.
Oil retreat gives growth stocks breathing room
Brent dropped more than 2%, and WTI fell below $100 as traders grew more confident that Saudi Arabia can restore export capacity after damage to its East-West pipeline. This week's oil spike had revived inflation fears and pushed the 10-year Treasury yield above 5%. With crude and yields easing, some of the discount-rate pressure on long-duration technology shares has faded.
AI trade back in focus
Nvidia gained about 1% before the bell, and Alphabet rose roughly 2%, keeping the Nasdaq on track for a weekly gain. Goldman Sachs strategist Ben Snider noted in research this week that unusually strong S&P 500 earnings have been supported by AI capital expenditure and exceptional semiconductor margins. His base case is for profit growth to slow rather than collapse, suggesting the AI earnings story remains intact but becomes harder to repeat.
Quarterly derivatives expiry could distort moves
Friday brings the simultaneous expiry of major stock and index derivatives contracts, an event that can produce unusually heavy trading volume and abrupt index moves. RGA Investments chief investment officer Rick Gardner told MarketWatch that the expiry could magnify volatility because it comes right after a Fed hike and during an already difficult September for equities. That means Friday's tape may reflect positioning and hedging flows as much as investors' fundamental view.
Xenon plunges on trial pause
Xenon Pharmaceuticals fell about 28% before the bell after temporarily pausing new enrolment in trials of azetukalner for major and bipolar depression. The company said the decision followed reports of neurological and psychiatric side effects. Existing patients can continue treatment while Xenon evaluates dosing changes, and its separate epilepsy programme remains active. The drop makes Xenon one of Friday's largest individual premarket movers even as the broader technology-led tone remains positive.
For more on the broader market rebound, see Wall Street's post-Fed recovery and tech-led gains after the Fed's hike.
This article is for informational purposes only and does not constitute financial advice.
