US pre-open: Stocks seen flat as investors take a breather

US futures pointed to a muted open on Friday, with investors likely to pause for breath after the Dow and the S&P 500 hit fresh record highs again in the previous session.

At 1140 GMT, Dow Jones Industrial Average and Nasdaq futures were 0.1% higher, while S&P 500 futures were flat.

Analysts indicated a correction could be on the cards for US stocks following recent highs.

Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: “The US stocks extended gains to fresh historical highs. The relative strength index hint at deepening overbought conditions in the US stock markets, suggesting that the time for a correction could be approaching.”

Stocks ended in the black on Thursday after the European Central Bank announced the extension of its quantitative easing programme. ECB chief Mario Draghi said the central bank would keep buying government bonds through next year, albeit at lower amounts each month from April.

The ECB said it will buy €60bn a month in government bonds from April 2017 until December 2017, compared to €80bn currently.

With the ECB out of the way, attention will shift to next week’s announcement from the Federal Reserve, which is widely expected to hike rates.

Oanda’s Craig Erlam said: “The key to the meeting is likely to be how many rate hikes the Fed is forecasting for next year given that markets are currently only pricing in one by November, which I think is too few. Given the Fed’s bullish forecast for four last year and the much improved conditions this time around, it will be interesting to see what approach they take.”

In corporate news, Restoration Hardware Holdings tumbled in pre-market trade after it cut its outlook for the fourth quarter late on Thursday.

Meanwhile, oil prices were in the black ahead of a meeting of OPEC and non-OPEC members on Saturday to discuss production. West Texas Intermediate was up 1% to $51.36 a barrel and Brent crude was 0.7% higher at $54.28.

On the economic calendar, wholesale inventories and University of Michigan sentiment are at 1500 GMT.