Nasdaq Index, Dow Jones, S&P 500 News: Futures Cool after Tech Stock Surge

Key Points

• U.S. futures cool after tech-led market rally
• Japan’s Nikkei reaches 33-year high, tech-driven
• Treasury yields rise, market eyes inflation data

U.S. Stock Futures Decline Following Market Surge

U.S. stock futures are trading lower on Tuesday morning, cooling off after a significant rally the previous session. Monday’s rally saw major gains in the S&P 500 and Nasdaq Composite, mainly propelled by a rebound in mega-cap tech stocks like Nvidia. This shift comes after last week’s decline, with investors showing renewed interest in tech stocks, countering earlier concerns about their year-long performance.

At 10:33 GMT, the blue chip Dow Jones Industrial Average is trading 37820.00, down 113.00 or -0.30%. The benchmark S&P 500 Index is at 4787.75, down 13.50 or 0.28% and the tech-heavy Nasdaq-100 is trading 16738.00, down 65.75 or -0.39%.

Japan’s Nikkei Hits 33-Year High

Globally, Japan’s Nikkei 225 hit a remarkable 33-year high, driven predominantly by the tech sector. The gains mirror those in U.S. markets, with semiconductor and video game companies like Tokyo Electron and Nintendo leading the charge. Speculation about Nintendo’s potential new console release adds to the market enthusiasm.

After-Hours Trading Highlights

In the after-hours trading market, several companies made notable moves. Unity Software’s shares increased following a decision to cut a significant portion of its workforce. Conversely, Microchip Technology faced a drop in shares after revising its revenue forecast downwards. JetBlue Airways saw an uptick in shares amidst leadership changes.

Treasury Yields Rise

U.S. Treasury yields are inching higher overnight as investors ponder over the economic landscape and await upcoming inflation data. The 10-year Treasury note is showing a slight increase, reflecting the market’s anticipation of the Federal Reserve’s rate cut strategy. Federal Reserve Governor Michelle Bowman’s remarks on Monday indicated a careful approach to future policy changes, hinting at potential rate cuts later this year.

Short-Term Forecast: Cautiously Bullish Ahead of Key Economic Releases

The short-term market outlook remains cautiously bullish, with expectations of more all-time highs by the end of 2024, particularly in the tech sector. Imminent economic reports, such as the consumer price index (CPI) and producer price index (PPI), are set to provide crucial insights into the Federal Reserve’s interest rate decisions later this week. These data points are critical in shaping market expectations regarding inflation trends and the subsequent adjustments in the Fed’s monetary policy.

Technical Analysis

The E-mini S&P 500 Index is currently trading near the minor resistance level of 4808.25, slightly below its previous close of 4801.25, indicating slightly negative momentum.

However, the current price of 4787.00 is above both the 200-day and 50-day moving averages (4404.08 and 4591.80 respectively), suggesting an overall bullish trend.

If the index breaks above 4808.25, it could signal further bullish momentum. Conversely, a drop below the minor support of 4636.75 could indicate a shift to bearish sentiment.

Given the current positioning above key moving averages and near minor resistance, the market sentiment leans more towards bullish, yet with caution due to the close proximity to pivotal levels.