Nasdaq 100, Dow Jones, S&P 500 News: Fed’s Tone Shift Fuels Market Optimism while Earnings Waver

Highlights

• Slight pre-market dip after S&P, Nasdaq rallies.
• Array Technologies, Spirit AeroSystems stock prices fall.
• Fed’s dovish stance boosts market, despite earnings mix.

Mixed Ahead of Cash Market Opening

U.S. stock futures are slightly lower in the pre-market session on Wednesday, signaling a pause after the S&P 500 and Nasdaq Composite enjoyed their longest winning streaks since late 2021.

At 11:27 GMT, the blue chip Dow futures are trading 34230.00, up 15.00 or +0.04%. The benchmark S&P 500 Index is at 4395.25, down 0.75 or -0.02% and the tech-weighted Nasdaq-100 is at 15363.75, down 10.50 or -0.07%.

Corporate Performance Weighs

Corporate updates factored into the tempered sentiment, with Array Technologies witnessing a sharp 11.8% drop after projecting weaker-than-expected full-year figures. Similarly, Spirit AeroSystems shed 14% following its capital-raising announcement.

Despite these setbacks, the broader market’s performance remained robust in the previous session, with the S&P 500 and Nasdaq extending their consecutive gains to seven and eight days, respectively, marking the longest rally since November 2021. Apple stood out, propelling both indices with a notable 1.5% rise.

Fed’s Dovish Shift and Economic Data

Fundstrat’s Tom Lee attributes the market’s recent uplift to the Federal Reserve’s dovish pivot, coupled with economic indicators suggesting a ‘soft landing’ scenario. Market internals have shown significant strength, enhancing investor sentiment. The S&P 500, in particular, has surged over 4% in November alone.

Earnings Season Insights

The earnings season has seen a divergence, with 80% of S&P 500 companies exceeding profit forecasts but only 59% surpassing revenue expectations, reminiscent of the fourth quarter of 2015. With major tech players’ results already public, analysts like Mahoney foresee a stable market trajectory into 2024, driven by a balanced economic climate conducive to controlled Federal Reserve policies.

Outlook Ahead of Opening Bell

While the immediate market reaction may appear bearish due to recent corporate financial disclosures, the underlying economic and market fundamentals suggest a bullish sentiment may prevail.

Investors are poised for the upcoming earnings reports from MGM Resorts, Walt Disney, and Take-Two Interactive, along with economic data on wholesale inventories, to further gauge the market’s direction.

Technical Analysis

The S&P 500 E-mini Futures are displaying a neutral stance in the short term, as the current daily price is marginally above the previous close, suggesting a flat opening with limited overnight change.

The price is situated above the 200-day moving average, indicating a potential long-term uptrend. However, the proximity to the 50-day moving average, which the price slightly surpasses, points to consolidation in the medium term.

The analysis is constrained, but the current positioning of the daily price between the two key moving averages hints at a cautiously optimistic sentiment.