Nasdaq Index, Dow Jones, S&P 500 News: Mixed Ahead of J&J, P&G Earnings

Key Points

• Dow surpasses 38,000; S&P 500, Nasdaq shows slight gains
• United Airlines reported strong earnings, boosting airline stocks
• Anticipation for Johnson & Johnson (J&J), Procter & Gamble (P&G) earnings ahead of the opening
• Netflix reports after the close

Stock Futures Show Mixed Signals as Dow Surpasses 38,000

Stock futures are displaying a mixed landscape during Tuesday’s pre-market session, following a notable trading session where the Dow Jones Industrial Average eclipsed the 38,000 mark for the first time. This achievement was mirrored by slight gains in the S&P 500 and Nasdaq Composite, both contributing to the S&P 500’s recent entry into bull market territory.

At 10:07 GMT, blue chip Dow Jones Industrial Average futures are trading 38179.00, down 20.00 or -0.05%. Benchmark S&P 500 Index futures are at 4881.75, up 0.75 or +0.02% and tech-heavy Nasdaq-100 Index futures are trading 17462.25, up 3.75 or +0.02%.

Airline Sector Soars

In the airline sector, United Airlines‘ shares ascended over 6% in extended trading, propelled by robust fourth-quarter results. This uplift in sentiment was echoed across the sector, with American Airlines, Southwest Airlines, Alaska Air Group, and Delta Air Lines all experiencing share price increases.

Earnings Season Underway

The focus remains on corporate earnings, with Johnson & Johnson, Procter & Gamble, and Lockheed Martin scheduled to report before the market opens. Netflix is poised to release its results after the market closes, adding to the anticipation surrounding this earnings season.

Treasury Yields and Economic Outlook

U.S. Treasury yields saw a modest increase as the market anticipates key economic data releases. Goldman Sachs’ upward revision of its GDP growth forecasts signals a stronger economic outlook. These developments, along with the Federal Reserve’s interest rate decisions, are critical for understanding the market’s direction.

Short-term Market Outlook: Cautiously Optimistic

While the market exhibits a bullish trend with major indices near all-time highs, there’s a sense of caution due to the rally’s heavy dependence on tech stocks like Nvidia. This contrasts with the broader market’s performance, suggesting potential volatility ahead. Investors are advised to maintain a balanced approach, blending optimism with a careful watch on market developments, especially given the narrow sector driving the current gains.

Technical Analysis

The E-mini Dow Jones futures contract is trading lower on Tuesday, retreating from its recent all-time high. Positioned above both the 200-day and 50-day moving averages, the market maintains a bullish stance in the intermediate and longer term.

The absence of established resistance levels with the market trading at an all-time high, opens potential for further upward movement. However, the current price action also raises the possibility of the market becoming overbought, making it susceptible to a near-term correction while not necessarily altering the main bullish trend.

The key support level, the 50-day moving average at 36908, remains robust and unthreatened, underpinning the market’s strength. Traders should be alert to short-term fluctuations but can remain optimistic about the overall upward trend.