Stock futures edge up after S&P 500’s best day since March

Stock futures opened slightly higher to extend gains after a rally on Wall Street, with stronger-than-expected earnings and economic data helping lift the S&P 500 by the most in seven months. 

Shares of big bank stocks including Bank of America (BAC), Citi (C) and Morgan Stanley (MS) steadied during the after-hours session. Each of these stocks had jumped earlier, after these banks posted much stronger-than-expected third-quarter earnings results. Peer banking titan Goldman Sachs (GS) is also set to report earnings results before the opening bell Friday morning. 

This week’s early batch of stronger-than-anticipated quarterly results has helped assuage investors’ concerns over a sharp deceleration in corporate profits, especially as expenses mount for companies across industries in the face of higher input and labor costs. Investors have at least temporarily looked through ongoing reports of shipping challenges and heightened prices, with new inflation data this week showing price increases at both the consumer and producer levels held at historically high levels at the start of the fall. Still, other upbeat economic data counterbalanced these reports, with Thursday’s weekly jobless claims report showing new unemployment filings fell more-than-expected to a pandemic-era low last week. 

“We’ve had a lot of volatility recently, and I think markets are looking for any little glimpse or glimmer of good news,” Jack Manley, JPMorgan Asset Management global market strategist, told Yahoo Finance Live. “The earnings season … has been good so far, and if history suggests anything, it’s only going to get better from here.” 

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Other strategists agreed that stocks may be set up to continue marching higher as earnings season continues, given the lowered expectations many investors maintained heading into the reporting season. 

“We’ve had a number of Wall Street strategists come out and call for a correction. If you look at things like the surprise indices, they’re all trending lower … earnings estimates for the third and fourth quarter have leveled off,” Jack Janasiewicz, portfolio manager for Natixis Investment Managers, told Yahoo Finance Live. “To me it feels like the market’s leaning bearish. And when we start to think about the buyer power that could come back in when everybody starts to flip positive — earnings might be that catalyst, [and] we could certainly see that upside.”

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6:11 p.m. ET Thursday: Stock futures hold onto earlier gains

Here’s where markets were trading Thursday evening:

• S&P 500 futures (ES=F): +4.75 points (+0.11%), to 4,433.75

• Dow futures (YM=F): +36 points (+0.1%), to 34,820.00

• Nasdaq futures (NQ=F): +22.5 points (+0.15%) to 15,059.75

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter