Nasdaq Index, Dow Jones, S&P 500 News: Nvidia Leads Tech Rally Ahead of NFP Report

Stock Futures Lower Despite S&P 500 Record High

Stock futures edged lower Thursday morning following a record closing high for the S&P 500. Nvidia’s rally, driven by its new AI chips, propelled the index. On Wednesday, the S&P 500 climbed 1.18% to close at 5,354.03, with an intraday peak of 5,354.16. The Nasdaq Composite surged 1.96% to 17,187.90, also hitting a new record. The Dow Jones Industrial Average added 0.25%, closing at 38,807.33. Nvidia rose over 5%, reaching a $3 trillion market cap and surpassing Apple.

At 11:05 GMT, Dow futures are trading 38861.00, down 23.00 or -0.06%. S&P 500 Index futures are at $5365.50, down 0.50 or -0.01% and Nasdaq futures are trading 19091.75, up 17.50 or +0.09%.

Stocks on the Move

Lululemon’s shares jumped 7% after exceeding fiscal first-quarter expectations. Conversely, Five Below plummeted nearly 15% following disappointing results and guidance.

Anticipated Fed Rate Cuts Stoking Bullish Sentiment

A Reuters poll indicates the U.S. Federal Reserve is expected to cut its key interest rate in September and again later this year. While most forecasters anticipate two rate cuts, the timing and number of cuts remain uncertain. Slower economic expansion last quarter and persistent inflation are key factors influencing these expectations.

Fed officials have signaled a cautious approach to rate cuts. The upcoming quarterly “dot plot” projection may show fewer cuts than previously expected. The majority of economists surveyed predict a September rate cut, with subsequent reductions expected based on economic conditions and inflation trends.

Inflation and Labor Market Outlook

Inflation, particularly the Fed’s preferred measure, the PCE price index, remains elevated. None of the key inflation indicators are expected to reach the Fed’s 2% target before 2026. This persistent inflation, coupled with low unemployment, makes immediate rate cuts unlikely. The unemployment rate is forecast to remain around 3.9% through 2027, indicating ongoing labor market tightness.

Goldman Sachs Predicts Market Inflows

Despite a sluggish start to June, Goldman Sachs’ Scott Rubner anticipates substantial market inflows in the second half of the year. Rubner forecasts a significant influx of capital into equities, driven by new quarterly and half-year investments. Additionally, retail traders are expected to re-enter the market in July, further boosting momentum.

Market Forecast

The recent surge in stock indices, powered by Nvidia and strong earnings reports, sets a bullish tone for the market. However, mixed signals from the Fed and persistent inflation suggest cautious optimism. Investors should watch for the nonfarm payrolls report on Friday, which could influence the Fed’s rate cut decisions and provide further market direction.

Technical Analysis

E-mini Nasdaq-100 Index futures are testing another record high early Thursday, There is no visible resistance, but the market remains susceptible to a closing price reversal top should sellers hit Nvidia or U.S. jobs data on Friday takes a September rate cut off the table.

The nearest support is the 50-day moving average at 18258.62.