The major U.S. index futures are pointing to a lower opening on Friday, with stocks likely to give back ground following the strong upward move seen in the previous session.
Traders may cash in on yesterday's gains going into the weekend amid lingering concerns about the financial crisis in Turkey and the outlook for the Turkish lira.
Uncertainty about the outcome of trade talks between the U.S. and China later this month may also weigh on the markets.
A report from the Wall Street Journal said the U.S.-China trade talks in Washington would take place on August 21st and 22nd, just before the next round of tariffs targeting $16 billion worth of goods on both sides kick in on August 23rd.
After coming under pressure on Wednesday, stocks moved mostly higher during the trading day on Thursday. The major averages all moved to the upside, with the Dow posting a particularly strong gain on the day.
While stocks gave back some ground late in the trading day, the major averages managed to remain positive. The Dow spiked 396.32 points or 1.6 percent to 25,558.73, the Nasdaq rose 32.41 points or 0.4 percent to 7,806.52 and the S&P 500 climbed 22.32 points or 0.8 percent to 2,840.69.
The higher close on Wall Street came following news China has accepted an invitation from the U.S. for a new round of trade talks to be held in late August.
China's Ministry of Commerce said that a Chinese delegation led by Vice Commerce Minister Wang Shouwen will travel to the U.S. for trade talks to be held with U.S. Under Secretary of Treasury for International Affairs David Malpass.
In an interview with CNBC, White House economic advisor Larry Kudlow confirmed the U.S. and China will resume trade talks later this month.
A positive reaction to earnings news from Walmart (WMT) also contributed to the strength on Wall Street, with the retail giant jumping by 9.3 percent.
The advance by Walmart came after the company reported better than expected second quarter results and raised its full-year guidance.
On the U.S. economic front, the Labor Department released a report showing first-time claims for unemployment benefits unexpectedly edged lower in the week ended August 11th.
The report said initial jobless claims dipped to 212,000, a decrease of 2,000 from the previous week's revised level of 214,000.
Economists had expected jobless claims to inch up to 215,000 from the 213,000 originally reported for the previous week.
Meanwhile, a separate report from the Commerce Department showed new residential construction rebounded by much less than expected in the month of July.
The report said housing starts rose by 0.9 percent to an annual rate of 1.168 million in July after plunging by 12.9 percent to a revised rate of 1.158 million in June.
Economists had expected housing starts to soar by 7.4 percent to an annual rate of 1.260 million from the 1.173 million originally reported for the previous month.
The Commerce Department also said building permits climbed by 1.5 percent to an annual rate of 1.311 million in July after dipping by 0.7 percent to a revised rate of 1.292 million in June.
Building permits, an indicator of future housing demand, had been expected to jump by 2.9 percent to a rate of 1.310 million from the 1.273 million originally reported for the previous month.
Financial stocks moved significantly higher over the course of the trading session, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index climbing by 1.4 percent and 1.2 percent, respectively.
Utilities, pharmaceutical telecom and biotechnology stocks also saw notable strength, although buying interest waned late in the trading day.
On the other hand, gold stocks extended their recent sell-off, dragging the NYSE Arca Gold Bugs Index down by 3 percent to its lowest closing level since early 2016.
Commodity, Currency Markets
Crude oil futures are climbing $0.66 to $66.12 a barrel after rising $0.45 to $65.46 a barrel on Thursday. Meanwhile, after edging down $1 to $1,184 an ounce in the previous session, gold futures are inching up $0.60 to $1,184.60 an ounce.
On the currency front, the U.S. dollar is trading at 110.40 yen compared to the 110.90 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1403 compared to yesterday's $1.1377.
Asia
Asian stocks ended Friday's session mostly higher, with a rebounding lira and news of fresh trade talks between China and the United States underpinning investor sentiment.
The Turkish lira has recovered strongly from Monday's meltdown, when it hit a record low below 7.23 to the dollar following U.S. imposed sanctions relating to the detention of an American pastor.
Meanwhile, the Wall Street Journal reported that U.S.-China trade talks in Washington would take place on August 21st and 22nd, just before the next round of tariffs targeting $16 billion worth of goods on both sides kick in on August 23rd.
Despite the advance by most markets in the region, Chinese shares hit a 31-month low as healthcare firms retreated amid concerns over a widening vaccine scandal. The benchmark Shanghai Composite Index fell 36.23 points or 1.3 percent to 2,668.97, although Hong Kong's Hang Seng Index rose 113.35 points or 0.4 percent to 27,213.41.
Japanese share closed higher even as technology stocks succumbed to selling pressure after Applied Materials issued weaker-than-expected guidance for the fiscal fourth quarter. The Nikkei 225 Index climbed 78.34 points or 0.4 percent to 22,270.38, and the broader Topix index closed 0.6 percent higher at 1,697.53.
Kawasaki Kisen Kaisha, Pacific Metals, Credit Saison, Kobe Steel, Mitsui OSK Lines and Nikon climbed 2-5 percent. Tokyo Electron dropped 1.4 percent and Screen Holdings tumbled 2.9 percent.
Australian shares closed modestly higher after strong earnings results from the likes of Goodman Group and Link Administration Holdings. The S&P/ASX 200 Index inched up 10.90 points or 0.2 percent to 6,339.20, while the broader All Ordinaries Index finished up 0.2 percent at 6,426.20.
Banks followed their U.S. peers higher, with ANZ, Commonwealth, NAB and Westpac rising between 0.2 percent and 0.7 percent.
Property group Goodman Group jumped 5.3 percent after its annual statutory profit surged 41 percent. Administration services provider Link Administration Holdings soared 6.3 percent after reporting a 68 percent jump in full-year net profit.
Teleco Telstra added 0.7 percent to extend Thursday's gains after its annual profit topped forecasts.
On the other hand, weak iron ore prices pulled down mining stocks, with Fortescue Metals Group losing 1.2 percent and South32 declining 0.6 percent.
Gold miner Evolution Mining tumbled 3.9 percent after it projected lower gold production in the 2018-19 financial year. Origin Energy lost 2.2 percent and Sonic Healthcare declined 2.6 percent.
Europe
European stocks have fallen in cautious trading on Friday, as investors remain apprehensive about the lira's rebound and the outcome of upcoming U.S.-China trade talks.
The Turkish lira has held steady today despite an apparent threat of possible new sanctions by U.S. President Donald Trump.
While the German DAX Index has slid by 0.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are down by 0.6 percent and 0.5 percent, respectively.
Dutch oil and chemical storage firm Koninklijke Vopak N.V. has slumped after reporting a drop in second quarter earnings and revenue.
Air France-KLM has also tumbled in Paris after appointing a new chief executive amid labor strife.
Royal Bank of Scotland Group shares have edged down slightly in London. The bank confirmed that Ewen Stevenson would step down from the Board and cease to be Chief Financial Officer on September 30th.
Meanwhile, A.P. Moeller-Maersk shares have jumped after the Danish business conglomerate revealed plans for an independent listing for its drilling unit next year.
In economic news, the euro area current account surplus was unchanged in June, data from the European Central Bank showed. The current account surplus totaled a seasonally adjusted 24 billion euros in June, the same as seen in May.
Separately, final data from Eurostat showed Eurozone inflation accelerated for a third straight month in July to its highest level since late 2012, as initially estimated.
The harmonized index of consumer prices rose 2.1 percent year-on-year in July after climbing 2 percent in June. The rate came in line with the estimate published on July 31st.
U.S. Economic Reports
At 10 am ET, the University of Michigan is scheduled to release its preliminary report on consumer sentiment in the month of August. The consumer sentiment index is expected to inch up to 98.0 in August after dipping to 97.9 in July.
The Conference Board is also due to release its report on leading economic indicators in the month of July at 10 am ET. The leading economic index is expected to rise by 0.4 percent in July following the 0.5 percent increase in June.
Stocks In Focus
Shares of Applied Materials (AMAT) are moving notably lower in pre-market trading after the semiconductor equipment maker reported better than expected fiscal third quarter results but provided disappointing guidance for the current quarter.
Graphics chip maker Nvidia (NVDA) is also likely to come under pressure after reporting second quarter results that exceeded estimates but providing a disappointing current quarter forecast.
Shares of Deere & Co. (DE) may also move to the downside after the farm equipment maker reported fiscal third quarter earnings that missed expectations due to cost pressures for raw materials and freight.
On the other hand, shares of Nordstrom (JWN) are likely to see early strength after the retailer reported better than expected second quarter results and raised its full-year guidance.
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