Wall Street Rallies on Banking Surge and Easing Inflation Concerns

U.S. stock index futures rose as the S&P 500 and Dow prepared for their largest weekly gains since November. This optimism was fueled by strong bank earnings and cooling inflation. However, investors remain cautious about the impending policy changes from President-elect Donald Trump's administration.

U.S. stock index futures moved higher on Friday, with the S&P 500 and Dow Jones Industrial Average poised to register their most significant weekly gains since November. The uptick comes as investors anticipate policy shifts under the new Trump administration.

Performance in banking led the charge, with major banks posting better-than-expected earnings and calming inflation providing a boost to risk appetite. The S&P 500 banking index and regional banks topped advances this week, soaring by approximately 5.8% and 6.4%, respectively. Meanwhile, bond yields dipped, bolstering confidence among Wall Street traders.

With President-elect Donald Trump's inauguration on the horizon, investors are keenly watching for insights into his potential economic strategies. While the S&P 500 has climbed 3% since Election Day, concerns linger that certain policies might incite a trade war, affecting pricing and Federal Reserve decisions.

(With inputs from agencies.)