Market Snapshot: U.S. stocks climb after China rate cut, as Dow heads for 8th straight losing week

Read: Selloff puts S&P 500 on bear market’s doorstep. If history is a guide, there’s more pain ahead.

What’s driving markets?

Wall Street took a cue from a strong Asian session, where the Hong Kong Hang Seng
HSI,
+2.96%
rallied 2.9% and the China CSI 300 index
000300,
+1.95%
gained 1.9%.

The People’s Bank of China on Friday cut in its rate on five-year loans, aimed at shoring up weak housing sales by cutting mortgage costs. The country has been battling COVID outbreaks, with lockdowns in industrial hubs such as Shanghai blamed for weak factory and consumer activity data in April.

“The news out of China and the successful test of the S&P 500 holding support is poised to pull the index out of the danger zone. We reiterate; for now, we think the market has placed in a bottom,” Peter Cardillo, chief market economist at Spartan Capital, told clients in a note.  

He noted the index came close to that support level of 3,850, but didn’t get there, instead hovering around 3,860.

Major U.S. stock indexes are likely facing yet another week of losses. The Dow industrials is set for its eighth-straight weekly loss, which would be its longest since April 1932, according to Dow Jones Market Data.

Losses have come amid concerns about whether soaring inflation can be brought under control by the Federal Reserve without derailing the economy.

Major retailers this week, such as Walmart
WMT,
+0.71%
and Target
TGT,
+0.37%
reported disappointing profits, against a backdrop of rising expenses and inflation.

Read: Swiss running shoe company On Holding runs with premium pricing despite inflation

The U.S. economic data calendar is empty for Friday, but next week will bring another round of inflation data, personal consumption expenditure prices excluding food and energy.

Which companies are in focus

• Shares of Ross Stores Inc.
  ROST,
  -23.09%
  slumped nearly 22% after the retailer became the latest to report disappointing quarterly results and trim its outlook, blaming higher inflation and rising freight and wage costs.
• Deere & Co.
  DE,
  -10.08%
  shares slipped 7.5% after the agriculture, construction and forestry equipment maker reported better-than-expected fiscal second-quarter profit and revenue.
• Applied Materials Inc.
  AMAT,
  -2.14%
  stock slipped 1.6% after the chip-equipment maker reported a miss on profit, revenue and forecast amid continued supply chain woes.
• Foot Locker
  FL,
  +5.71%,
  the athletic footwear and apparel retailer, saw its shares rise more than 9% after it reported first-quarter profit that beat expectations. 

How are other assets trading?

• The yield on the 10-year Treasury note 
  TMUBMUSD10Y,
  2.850%
  edged down 0.5 basis point to 2.848%. Yields and debt prices move opposite each other.
• The ICE U.S. Dollar Index 
  DXY,
  +0.28%
  rose 0.2%
• Bitcoin 
  BTCUSD,
  +0.28%
  was off 0.8% near $30,100.
• Oil futures rose, with the U.S. benchmark 
  CL.1,
  +0.49%
  up 0.7% near $111 a barrel. Gold futures 
  GC00,
  -0.27%
  were flat near $1,841.
• The Stoxx Europe 600 
  SXXP,
  +1.37%
   rose 1.4%, while London’s FTSE 100 
  UKX,
  +1.66%
  rose 1.7%.