US pre-open: Stock futures rise, but deficit fears limit upside
By Benjamin Chiou
Date: Friday 23 May 2025
(Sharecast News) - Wall Street stocks are expected to inch higher on Friday after three days in the red, though concerns about the staggering amount of US government are keeping risk appetite in check.
By 0515 ET, futures on the Dow, S&P 500 and Nasdaq were rising between 0.1% and 0.2%. The S&P 500 in particular, has fallen for three consecutive sessions - albeit only modestly - after hitting a three-month high on Monday.
Softer-than-expected demand at US 20-year bond auction on Wednesday, and the House passing Donald Trump's controversial tax bill by a narrow margin, have added to concerns about fiscal outlook in recent days - with the focus firmly on rising bond yields.
Ahead of the open on Friday, 10-year US bond yields were falling 1.8 basis points to 4.522%, retreating for the second straight day after topping the 4.6% mark on Wednesday for the first time since February.
Meanwhile, the US dollar was continuing to weaken, with the dollar index trading below the 100-point mark - close to a 52-week low of 97.92 - as haven demand flows into precious metals. Gold was up 1% at $3,356.40 an ounce.
"Notably, with the debt concerns building off the back of the House passing of Trump's tax and spending bill, we are seeing support for gold in both positive and negative days for equity markets. That bill is expected to raise the expansion rate of the deficit by 34%, adding $3.8trn to the US national debt over the next decade," said Joshua Mahony, chief market analyst at Scope Markets.
"Thus, with yields on the rise, markets appear to be focusing on the debt concerns revolving around this bill rather than the benefits for businesses and consumers alike."
The only major economic data release of the day will be US new homes sales, due out at 1000 ET, which are expected to show sales falling to 692,000 in April after surging 7.4% to a six-month high of 724,000 in March.
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