Stock Futures Rise as Oil Extends Losses, Treasury Yields Rise

By Joe StonorU.S. stock futures extended gains and oil prices continued to fall in early European trade, though Treasury yields largely rose as investors brace for more rate hikes to come.Momentum returned to the trade in artificial-intelligence stocks, with chip makers in Asia gaining and AI supply-chain names rallying in Europe. In the U.S., premarket, chip maker Intel jumped 3.3%, while Nvidia gained 1.1%.All major U.S. indexes were in the green, after the S&P 500 and Nasdaq notched their best trading days in six weeks Thursday. Futures for the pair rose 0.4% and 0.7%, respectively. Futures for the Dow Jones Industrial Average added 0.25%.Lower oil prices contributed to the brighter market mood. Brent crude contracts slipped more than 2% to around $102.50 a barrel while WTI crude futures fell back below $100 a barrel. Investors are growing more optimistic around Saudi Arabia's ability to restore its East-West pipeline, analysts said.The Bank of Japan raised its policy rate by 25 basis points, joining other central banks in bumping up rates over the past two weeks. The global move to higher interest rates leaves "little doubt we're in a globally synchronized cycle of rate hikes again," said Deutsche Bank's Jim Reid.U.S. Treasury yields mostly rose, with 10-year yields ticking up to 4.948% and heading toward the 5% level hit earlier this week, while two-year yields added 2.2 basis points to trade at 4.705%. Yields on 30-year Treasurys were little moved at 5.285%.The Bank of Japan's vote was split, suggesting less support for the hike than had been expected. The yen weakened to a two-week low against the dollar. Meanwhile, the Chinese yuan rose to its strongest level in more than four years as the People's Bank of China ushered the currency higher ahead of the summit between President Trump and Chinese leader Xi Jinping next week.Japan's Nikkei 225 rose 1.7% following the decision, joining a stock market rally across the Asia-Pacific region. European stocks struggled after a strong session on Thursday, as the continent's more defensively constituted indexes lost out as investors returned to risk.Gold strengthened to hold above $4,400 a troy ounce. Bitcoin benefited from a broader return to risk, adding 1.8% to $77,736.80.For the day ahead, European Central Bank President Christine Lagarde will speak, and investors will watch for U.S. industrial production and capacity utilization data for August.Write to Joe Stonor at [email protected]