By Anna Hirtenstein
U.S. stock futures edged up Friday ahead of fresh data on the services and manufacturing sectors that are expected to point to a robust economic recovery.
Futures tied to the S&P 500 ticked 0.2% higher, pointing to muted gains after the opening bell. The broad market index is down 0.5% for the week so far. Nasdaq-100 futures also added 0.2%.
Stocks have come under pressure in recent days as concerns about the pace of economic recovery, high valuations for technology stocks and rising bond yields weighed on sentiment. On Friday, investors will get to assess purchasing managers' views on the outlook for both the services and manufacturing sectors at 9:45 a.m. ET.
"Investors are taking a little bit of a pause," said Arthur van Slooten, global asset allocation strategist at Société Générale. "We believe there is further to go. When the reflation trade is back on and there's more confidence about this, we'll see a continuation of the market performance that we've had" in recent weeks, he added.
In bond markets, the yield on the 10-year Treasury note rose to 1.309%, from 1.286% on Thursday. Yields have climbed this week, prompting some investors to question whether risky assets such as stocks are looking less attractive, said Kiran Ganesh, a multiasset strategist at UBS Global Wealth Management.
"A main driver for equity markets over the past few months has been a lack of competition," Mr. Ganesh said. "If yields rise, then we could see some people rotating away from growth names and toward credit or bonds."
Oil prices pulled back after U.S. diplomats said Thursday evening that they may meet with Iran officials for nuclear talks in the coming weeks, prompting speculation that a deal could allow Iran to begin exporting more crude. Brent crude declined 0.9% to $63.33 a barrel and the U.S. benchmark, West Texas Intermediate, fell 1.3% to $59.75.
Investors are closely watching "how quickly Iran could re-enter the market," said Bjarne Schieldrop, chief commodities analyst at Nordic bank SEB. The country is expected to add between 2 and 3 million barrels a day to global production if sanctions are lifted, he said.
Overseas, the pan-continental Stoxx Europe 600 climbed 0.3%.
Among European equities, Hermès International climbed 5.7% after the luxury-goods company said its revenue grew in the second half of the year and it announced a dividend.
In Asia, major stock benchmarks were mixed by the end of trading. The Shanghai Composite Index closed up 0.6%, while Japan's Nikkei 225 retreated 0.7%.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
02-19-21 0519ET
