Nasdaq Index, Dow Jones, S&P 500 News: Stock Futures Climb on Earnings Ahead of ADP Data

Stock Futures Rise as Investors Eye Labor Data and Earnings

Stock futures edged higher Wednesday as investors prepared for private payroll data while analyzing recent corporate earnings. Hewlett Packard Enterprise climbed more than 14% after surpassing Wall Street expectations in its fiscal second quarter. CrowdStrike jumped almost 7% on stronger-than-expected earnings and guidance.

At 11:58 GMT, Dow futures are trading 38875.00, up 88.00 or +0.23%. The S&P 500 Index futures contract is at 5320.50, up 16.50 or +0.31% and Nasdaq futures are trading 18807.00, up 106.00 or +0.57%.

These gains followed a modestly positive day on Wall Street. The Dow climbed about 140 points, while the S&P 500 and Nasdaq Composite each added close to 0.2%. Tuesday’s data provided initial insights into the labor market, a crucial focus for traders seeking signs that the Federal Reserve might consider easing interest rates.

Labor Market Insights and Upcoming Data

Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) reported 8.059 million vacancies in April, the lowest level in over three years and below the 8.4 million forecast by economists surveyed by Dow Jones. This decline could indicate easing labor market conditions.

Wednesday morning will bring the ADP employment report, with economists predicting private employers added 175,000 jobs in May. Traders will also monitor data on services and non-manufacturing purchasing. Later in the week, attention will turn to weekly jobless claims on Thursday and the critical May jobs report on Friday.

“Upcoming labor market releases are a clear focus for the broad market,” said Bill Northey, investment director at U.S. Bank Wealth Management. “Investors are eyeing the most recent readings on labor market health — JOLTS today, the ADP survey tomorrow, and the Bureau of Labor Statistics labor report on Friday. All are important data points from a monetary policy standpoint.”

Corporate Developments and Earnings

Lululemon is set to post earnings after the market closes, adding to the week’s busy earnings schedule. In other corporate news, Deere announced job cuts in a regulatory filing, stating plans to streamline its workforce to meet strategic priorities amid a demand slowdown for farm equipment. Deere shares remained relatively unchanged in premarket trading.

Dollar Tree revealed plans to explore a sale or spinoff of Family Dollar, less than a decade after acquiring the chain in a troubled merger. Family Dollar, catering to low-income customers with around 8,000 US stores, has struggled with messy stores, high prices, over-expansion, and stiff competition from Walmart and Dollar General. Dollar Tree’s stock fell 3% in premarket trading following the announcement.

Market Forecast

The current market sentiment is cautiously optimistic, with traders focusing on upcoming labor market data to gauge the Federal Reserve’s next moves. If employment data suggests a cooling labor market, it could strengthen the case for potential rate cuts. Conversely, stronger-than-expected job growth may delay any easing of monetary policy. Overall, the market outlook will largely depend on the forthcoming economic indicators and their implications for inflation and interest rates.

Technical Analysis

With the intermediate and long-term uptrends clearly established, investors are set to resume the short-term uptrend with a pass to the strong side of the pivot at 5286.75. This is new support.

A sustained move above this level is needed to create the momentum needed to challenge the record high at 5368.25. A failure to do so will likely lead to a retest of the 50-day moving average at 5217.50.