The futures market reflects what is likely to be a mixed disposition for the major indices when the opening bell rings.
The S&P futures are down eight points and are trading 0.3% below fair value. The Dow Jones Industrial Average futures are down 128 points, leaving them 0.5% below fair value, and the Nasdaq 100 futures are up 3 points, which leaves them 0.1% above fair value.
Microsoft (MSFT) is the difference maker. Its stock is up 3.4% after impressing investors with its fiscal fourth quarter results and fiscal first quarter guidance. The Dow component's robust year-over-year revenue growth of 17.5% has fueled the market's affinity for growth stocks -- and particularly technology stocks with a growth orientation.
Hence, the Nasdaq 100 futures are exhibiting relative strength. The broader market, however, is acting lackluster on the heels of Thursday's lackluster outing.
Things could be worse if not for Microsoft, and other stocks, like Stanley Black & Decker (SWK), Cintas (CTAS), Honeywell (HON), Schlumberger (SLB), Intuitive Surgical (ISRG), Capital One Financial (COF), and V.F. Corp (VFC), all of which are trading higher after reporting their quarterly results.
General Electric (GE) had been trading higher after posting better-than-feared results, but a cut in its free cash flow guidance has reined it back in.
Gains in the other stocks noted above have helped mitigate some of the reported negativity stemming from President Trump's contention in a recorded CNBC interview that he is ready to impose tariffs on all $505 billion of Chinese imports.
That's a serious statement, yet it was largely a regurgitation of a tariff threat market participants already knew was in the loop of trade discussions.
The impact of the statement today is rooted in the recognition that the president continues to dig in his heels when it comes to dealing with China on the trade imbalance, which is fostering a belief that this matter -- and the uncertainty that goes along with it -- could be a protracted affair.
If the market truly believed, however, that tariffs were imminent on the full basket of imported Chinese goods, one can rest assured that there would be a major setback in the futures market that isn't being seen this morning.
On that score, then, the reported angst about the president's statements on trade, and the acknowledgment heard yesterday that he is not thrilled with the Fed raising interest rates, has offered a headline catalyst for the market to pull back on the reins of the post-Fourth of July rally.
Another cause for pause has been the strengthening in the dollar, which is stirring concerns about futures earnings growth estimates possibly needing to be dialed back, and the weakening in the Chinese yuan, which is stirring concerns about competitive devaluation and China digging in its heels when it comes to dealing with the U.S. on trade matters that it can't combat with comparable tariffs.
There isn't any economic data of note today, yet the pace of economic growth will continue to be a topic of debate since it is clear the topics of tariffs, rising interest rates, and currency moves are not going away soon.