Nasdaq 100: Tech Stocks Lead Gains as Investors Eye Revised GDP and Jobless Data

Stock Market Gains as Investors Digest Economic Data and Earnings Reports

Stocks rose on Thursday as Wall Street attempted to rebound from prior session losses, buoyed by a mix of favorable economic data and a range of post-earnings moves. Investors focused on key earnings reports from Nvidia and Salesforce, which had a significant impact on market sentiment.

At 14:08 GMT, the Dow Jones Industrial Average is trading 41284.89, up 193.47 or +0.47%. The S&P 500 Index is a 5623.27, up 31.09 or +0.56% and the Nasdaq-100 Index is trading 17728.33, up 172.30 or +0.98%.

Economic Data Boosts Confidence

The release of positive economic data provided a supportive backdrop for the stock market. Weekly jobless claims came in lower than the previous week, signaling ongoing strength in the labor market and easing fears of an impending recession. The number of initial unemployment claims totaled 231,000 for the week ending August 24, slightly above the Dow Jones estimate but still reflecting a healthy employment environment.

Adding to the positive economic narrative, the U.S. Commerce Department revised its second-quarter GDP growth estimate upward to 3% from the initial 2.8%. This adjustment was largely driven by stronger-than-expected consumer spending, which grew at a 2.9% pace. The revision underscores the resilience of the U.S. economy amid concerns about slowing global growth. Inflation metrics, including the Personal Consumption Expenditures (PCE) price index, were also revised lower, indicating that inflation pressures might be moderating.

Sector Performance Mixed as Tech Leads Gains

Sector performance was mixed, with technology stocks leading the charge. The Technology sector gained 0.97%, driven by strong performances from key players. Nvidia, however, saw its shares dip over 4% despite exceeding earnings expectations. The company’s revenue outlook for the third quarter, although projecting 80% year-over-year growth, failed to meet the most bullish investor expectations, suggesting a potential slowdown.

Conversely, Salesforce shares surged by 5% following its earnings report, which beat estimates and included an upward revision to its full-year outlook. On the other hand, the Consumer Staples and Real Estate sectors struggled, with declines of 0.43% and 0.44%, respectively, reflecting investor rotation away from defensive sectors.

Market Forecast: Cautious Optimism Amid Volatility

Looking ahead, market participants should brace for increased volatility as the economic outlook remains uncertain. While the revised GDP figures and lower jobless claims are positive indicators, concerns about inflation and potential economic slowdowns still linger. Investors should pay close attention to upcoming economic data releases and corporate earnings reports, which could provide further direction.

In the short term, the market may continue to experience mixed movements, with sectors such as technology likely to remain in focus. However, the potential for further gains may be tempered by profit-taking and caution as traders digest the implications of the latest data and earnings. A balanced approach with selective exposure to growth sectors like technology and consumer discretionary could be prudent in this environment.

Technical Analysis

E-mini Nasdaq-100 Index futures are edging higher on Thursday, recovering from overnight weakness. The daily chart shows buyers came in following a test of the pivot at $19167.50. If this level fails then we could see a steep drop with the 200-day moving average at 18491.91 the next major target.

Holding above the pivot will signal the presence of buyers. If this creates enough upside momentum then look for a near-term test of the 50-day moving average at 19639.27.