U.S. stock futures point higher, FTX sues Bankman-Fried – what’s moving markets

Investing.com — U.S. stock futures edge up ahead of the final trading day of the week, with investors looking ahead to major tech earnings and a key Federal Reserve interest decision next week. Elsewhere, FTX sues founder Sam Bankman-Fried and U.S. regulators withdraw a case before an in-house judge that was aiming to block the $69 billion merger between Microsoft and Activision Blizzard.

1. U.S. stock futures inch higher

U.S. stock futures pointed up Friday after earnings from Tesla (NASDAQ:) and Netflix (NASDAQ:) cast some doubt over a recent rally in tech stocks in the prior session.

At 05:03 ET (09:03 GMT), ticked up by 9 points or 0.19%, gained 32 points or 0.09%, and rose 59 points or 0.38%.

The tech-heavy slipped to its largest one-day decline in over four months on Thursday, dragged down by disappointing results from electric carmaker Tesla and streaming giant Netflix, while the benchmark also lost ground. Enthusiasm for artificial intelligence has contributed heavily to a recent surge in tech stocks that has helped power a jump in stock markets this year.

The broad-based posted its ninth consecutive winning day, its longest streak of increases since 2017, buoyed in part by upbeat profit estimates from Johnson & Johnson. The 30-stock index also climbed to its highest close since March 2022.

2. American Express to report; tech titans ahead

Second quarter earnings season in the U.S. is set to temporarily slow Friday, following a batch of stronger-than-anticipated results from several major companies this week.

Credit card company American Express (NYSE:) will feature on the earnings calendar before the start of the U.S. trading day, along with car retailer AutoNation (NYSE:). According to FactSet data cited by CNBC, 73% of the S&P 500 firms that have already reported have beat analysts’ estimates, fuelling hopes that the broader U.S. economy may be able to engineer a soft landing despite an unprecedented string of interest rate hikes by the Federal Reserve.

Investors will have a chance next week to dive into the numbers from some of the country’s biggest tech players, including traditional powerhouses like Microsoft (NASDAQ:), Google-owner Alphabet (NASDAQ:), and Amazon (NASDAQ:).

Also looming in the background is a key policy decision from the , with the U.S. central bank widely expected to raise borrowing costs by another 25 basis points. Whether officials will then decide to back away from its long-standing tightening cycle remains to be seen.

3. FTX sues Bankman-Fried

Bankrupt cryptocurrency exchange FTX has filed a lawsuit against founder Sam Bankman-Fried and other former top executives in a bid to recover over $1B in allegedly misappropriated funds.

Along with Bankman-Fried, the lawsuit named as defendants Caroline Ellison, who led FTX’s trading arm Alameda Research, as well as former technology chief Zixiao “Gary” Wang and former engineering director Nishad Singh.

Turnaround expert John Ray, who replaced Bankman-Fried at the helm of FTX in November, and his executive team claim that the defendants committed “one of the largest financial frauds in history” by misusing funds to finance bonuses, luxury real estate, and speculative investments. Ray — widely known as the overseer of energy giant Enron’s liquidation — is arguing that the money belongs to FTX’s creditors, including thousands of customers who were unable to access their assets after the group suspended withdrawals last year.

A spokesman for Bankman-Fried, who also faces criminal charges from U.S. prosecutors, declined a request to comment from Reuters. Lawyers for the other defendants did not immediately respond to a Reuters request for comment.

4. FTC withdraws in-house challenge to Microsoft-Activision mega-merger

The U.S. Federal Trade Commission has suspended its request for an in-house judge to block the $69B tie-up of Microsoft and video game maker Activision Blizzard (NASDAQ:), bringing the deal one step closer to completion.

An FTC administrative law judge was supposed to have heard the case on Aug. 2, but the agency chose on Thursday to put this particular attack against the merger on hold. However, the FTC could still re-file the challenge at a later date.

Regulators in both the U.S. and Britain have expressed worries over how the merger may impact competition, arguing that Microsoft could make “Call of Duty” exclusive to its Xbox console and, in effect, muscle out rival platforms.

But their opposition has been showing signs of softening. A U.S. federal judge and an appeals court rejected a separate FTC injunction request last week. The U.K.’s competition watchdog, which previously blocked the deal, subsequently said it was once again open to hearing Microsoft’s remedies to its concerns.

Microsoft and Activision have now extended the deadline to wrap up the transaction to Oct. 18.

5. Oil rises on hopes for more Chinese stimulus

Crude prices rose Friday, closing a volatile week with gains on rising hopes that China, the world’s largest crude importer, will roll out more stimulus measures to support its stuttering economic recovery.

The country revealed disappointing second quarter growth numbers earlier this week, prompting Beijing to unveil new measures on Friday aimed at lifting sales of cars and electronics to bolster economic activity.

But gains have been tempered as traders exercised caution ahead of next week’s Fed meeting. The has also rebounded from a 15-month low ahead of the gathering.

By 05:04 ET, the futures traded 0.78% higher at $76.24 a barrel, while the contract climbed 0.74% to $80.23 per barrel.

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