Stocks Surge as Fed Rate Expectations Boost Market Optimism

U.S. stock futures rose on Friday, driven by hopes of a September interest rate cut. UnitedHealth surged after Berkshire Hathaway invested in it, while the overall healthcare sector outperformed. Expectations of Federal Reserve easing in response to labor market challenges supported broader gains as investors awaited retail sales data.

American stock futures experienced a boost on Friday, largely influenced by the anticipated interest rate cut in September, with the Dow and S&P 500 climbing steadily. This optimism comes as UnitedHealth's shares surged over 12% following Berkshire Hathaway's recent investment, signaling strong confidence in the healthcare sector.

UnitedHealth's impressive gains were mirrored by other insurers like Elevance, Centene, and Molina, each recording over 4.4% increases before market open. The broader U.S. stock indexes also showed positive trends, fueled by expectations that the Federal Reserve could reintroduce monetary policy easing as early as next month.

While this buoyant outlook was tempered somewhat by underwhelming forecasts from chip equipment maker Applied Materials due to slowing demand, major stocks like Intel saw significant gains. Investors are closely watching retail sales and consumer confidence reports for further market cues.

(With inputs from agencies.)