Nasdaq Index, Dow Jones, S&P 500 News: Outlook Bullish Led by Tech Dominance

Key Points

• S&P 500 approaches 5,000, driven by tech stock gains.
• Disney and Arm Holdings see post-earnings share surges.
• Market bullish, eyes on upcoming CPI and jobless data.

Stock Market Preview

U.S. stock index futures are drifting sideways on relatively low volume during the pre-market session on Thursday. At 10:15 GMT, the blue chip Dow Jones is trading 38749.00, down 25.00 or -0.06%. Benchmark S&P 500 Index futures are at 5011.00, down 4.25 or -0.08% and tech-weighted Nasdaq-100 Index future are trading 17844.75, up 3.00 or +0.02%.

In the cash market on Wednesday, the S&P 500 edged closer to the 5,000 mark, finishing at 4,995.06, a 0.8% rise. This surge was largely driven by significant gains in technology stocks. Key players such as Meta Platforms, Nvidia, and Microsoft saw substantial increases, with the latter two reaching new record highs.

The Nasdaq Composite also experienced a near 1% increase, achieving another all-time closing high, while the Dow Jones rose by approximately 150 points.

Earnings Season Impact

This bullish trend is partly attributed to a robust fourth-quarter earnings season, surpassing expectations and bolstering investor confidence. This performance suggests a robust economy capable of sustaining corporate profitability.

Individual Stock Movements

Disney’s Positive Stride: Disney’s stock jumped about 6% in after-hours trading following a quarterly earnings beat and an upward revision in guidance, bolstered by effective cost-cutting measures.

Arm Holdings’ Leap: Arm Holdings experienced a significant 23% surge in its shares during extended trading, driven by strong earnings and an optimistic profit forecast.

PayPal’s Decline: Contrasting these gains, PayPal’s shares fell over 5% after-hours. The company’s full-year and first-quarter guidance fell short of expectations, with a forecasted earnings of $5.10 per share against the anticipated $5.48.

Treasury Yields and Fed Influence

Treasury yields remained relatively stable. Investors are currently evaluating recent comments from Federal Reserve officials. The 10-year Treasury yield saw a slight increase, while the 2-year yield experienced a marginal decrease.

Federal Reserve officials’ recent statements indicate a potential reduction in the pace of rate cuts, with the need for more data to assess inflation trends. These comments have slightly dampened hopes for imminent rate cuts.

Economic News: Labor Market Focus

Investors are set to closely monitor the upcoming jobless claims data, which will offer further insights into the labor market’s health, a key factor in assessing the economy’s overall stability.

Outlook: Bullish Tendency

The market is showing a bullish inclination, primarily driven by the strong performance of leading tech companies, an easing inflationary environment, and a dovish turn in monetary policy.

However, the upcoming consumer price index and jobless claims data are crucial for further market direction. These factors combined suggest a continuation of the current upward trend, albeit with cautious optimism, as investors await further economic indicators.

Technical Analysis

E-mini S&P 500 Index futures are slightly lower during the pre-market session as traders prepare for the regular session opening that could drive the cash market through the psychological 5000 level.

In the meantime, the threat of a near-term correction grows everyday as the gap between the current price at 5011.50 and the 50-day moving average at 4801.50 continues to widen, suggesting a “hot” or overvalued market.