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Nasdaq Index, Dow Jones, S&P 500 News: Tech Sector Struggling, Consumer Goods Facing Challenges

By:
James Hyerczyk
Published: Feb 15, 2024, 15:24 GMT+00:00

S&P 500 rises, Nasdaq falls: Retail sales dip hits consumer stocks, tech struggles, crypto gains.

Nasdaq-100, S&P 500 Index,, Dow Jones

In this article:

Key Points

  • Stock Market Reacts to Mixed Economic Reports
  • Tech Sector Pressured, Consumer Goods Show Strain
  • Cryptocurrency Stocks Benefit from Positive Sentiment

U.S. stock indexes are currently experiencing a mixed trade, as investors are actively evaluating a slew of economic reports. The focus is on balancing the implications of recent high U.S. consumer inflation against weaker retail sales data, in the context of the Federal Reserve’s likely interest rate changes.

At 15:00 GMT, Dow Futures are trading 38667.00, up 173.00 or +0.45%. S&P 500 Index Futures are at 5026.75, up 8.75 or +0.17% and Nasdaq-100 Index Futures are trading 17857.25, down 23.75 or -0.13%.

Retail Sales, Inflation, Employment Strength Impacting Early Trade

Retail sales have unexpectedly fallen by 0.8% in January, a steeper decline than the 0.3% forecasted.

This significant drop, especially in sectors like building materials and motor vehicle parts, is stirring concerns about consumer spending power in a high inflation environment. In contrast, January’s inflation figures showed a moderate increase, hinting at economic resilience.

In the employment arena, there’s a brighter picture. Unemployment claims have declined to 212,000, suggesting a robust job market. This strength in employment is a crucial factor underpinning consumer confidence and spending, which are vital for sustained economic growth.

Stock Market Reaction

In response to these mixed economic signals, the stock market is exhibiting cautious optimism. Major U.S. stock indexes are adjusting as investors weigh the potential impacts on corporate earnings and future growth. Specific sectors and companies are reacting variably to the economic data:

  1. Tech Sector: Companies like Cisco are under pressure, with shares dropping due to weak forward sales projections and layoff announcements.
  2. Consumer Goods: Retailers and manufacturers in the consumer goods sector, particularly those in building materials and motor vehicle parts, are showing signs of strain from the decline in retail sales.
  3. Cryptocurrency-Related Stocks: Coinbase, for example, is seeing an uplift, likely influenced by rising cryptocurrency prices and market sentiment.

Short-Term Forecast

Looking ahead, the market is trading more on economic growth and earnings projections than on interest rate and inflation concerns. With the Federal Reserve’s policy decisions looming, short-term market prospects appear cautiously bullish. The strength in the labor market and manufacturing, coupled with resilient consumer spending, are key factors supporting this outlook. However, investors should brace for volatility as the market assimilates these varied economic inputs.

Technical Analysis

Daily E-mini Nasdaq-100 Index

E-mini Nasdaq-100 Index futures are drifting lower on Thursday, bucking the trend of the S&P 500 and the Dow.

Remember that the index is still under the control of the potentially bearish closing price reversal top on Monday, and will be until buyers take out 18121.50.

Monday’s high at 18121.50 and Tuesday’s low at 17542.00 has formed a small trading range. Nonetheless, its retracement zone at 17831.75 to 17900.13 is very significant to the near-term direction.

Look for a bullish trend to develop on a sustained move over 17900.13 and for a bearish tone to develop on a sustained move under 17831.75.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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