Dow futures give back gains on fading hopes of aggressive easing from the Fed

U.S. stock index futures gave back much of their gains Friday morning after initially rallying when two influential Fed officials hinted at more aggressive policy easing.

Around 6:40 a.m. ET, Dow futures implied a positive open of around 47 points, after surging triple digits overnight. The S&P 500 and Nasdaq futures were also seen higher.

Stocks had been heading south on Thursday until New York Fed President John Williams said the central bank needed to “act quickly” when the economy was slowing and rates were low, adding in a speech that it is “better to take preventative measures than wait for disaster to unfold.”

The S&P 500 reversed its trajectory to close 0.4% higher at 2,995.11, led by a 0.8% gain in consumer staples, while the Nasdaq and Dow Jones Industrial Average also finished the session marginally in positive territory..

However, a spokesperson for the New York Fed moved to cool the speculation arising from Williams’ comments, telling CNBC that he was drawing from academic research, not hinting at potential policy actions at the upcoming Federal Open Market Committee (FOMC) meeting.

Investors on Thursday digested a mixed flurry of corporate earnings, as Netflix shares plummeted more than 10% after the streaming giant reported a surprise loss in U.S. subscribers, while Microsoft shares hit record highs after it beat analysts’ estimates for fourth-quarter revenue and profit.

IBM reported its fourth consecutive revenue decline, while Morgan Stanley beat expectations.

American Express and BlackRock are among those reporting before the bell on Friday.

Investors will also be monitoring another escalation of tensions in the Middle East, after President Trump said a U.S. Navy ship destroyed an Iranian drone in a “defensive action” in the Strait of Hormuz.