Nasdaq Index, Dow Jones, S&P 500 News: Wall Street Edging Higher on Tech Sector Strength

U.S. Stock Index Futures Climb

U.S. stock index futures edged higher on Monday, driven by expectations ahead of a major AI conference and key monetary policy updates from the Federal Reserve.

At 11:51 GMT, Dow futures are trading 39188.00, up 35.00 or +0.09%. S&P 500 Index futures are at 5216.50, up 33.75 or +0.65% and Nasdaq-100 Index futures are trading 18254.25, up 195.50 or +1.08%.

Treasury Yields Stability

The U.S. Treasury yields remained relatively stable as investors focused on the Federal Reserve’s March meeting, seeking insights on future interest rate trends. The central bank’s meeting on Tuesday and Wednesday is expected to maintain the current interest rates. However, investors are eager for hints about potential rate cuts and the number of adjustments anticipated this year. This investor sentiment follows February’s inflation data, which slightly exceeded expectations, suggesting ongoing price rise pressures. The Federal Reserve has indicated its data-dependent approach in rate decisions, looking for more signs of inflation easing.

Stock Market Uptick

Leading the market rise, tech stocks showed strong early performance. Nvidia’s shares increased over 2% premarket, ahead of their Global Technology Conference. Alphabet’s shares saw a 4% rise following reports of Apple considering incorporating Gemini AI into iPhones. Similarly, Super Micro Computer’s stock climbed by 2.8% as it joined the S&P 500.

Alphabet’s Potential Collaboration with Apple

Alphabet experienced a 4% surge in pre-market trading amid reports of Apple’s interest in utilizing Gemini AI for iPhone functionalities. Negotiations between the two tech giants suggest the integration of Gemini AI in upcoming iPhone software. Reports also indicate Apple’s discussions with OpenAI, contributing to Apple’s shares increasing by about 0.3%.

Federal Reserve Meeting Anticipation

Investors await the Federal Reserve’s policy meeting, starting Tuesday and concluding Wednesday. Current projections from the CME FedWatch Tool indicate a 99% chance of unchanged interest rates this week, with a slightly reduced probability (55%) of a June rate cut. LPL Financial’s Quincy Krosby suggests that the Fed’s guidance on maintaining steady rates could help the market stabilize before the new earnings season.

Inflation Concerns and Market Impact

Inflation worries have recently weighed on stocks, with the S&P 500 entering Monday after two consecutive weeks of losses. The Dow and Nasdaq also experienced marginal declines. February’s higher-than-expected core and wholesale inflation figures have heightened concerns about the Fed maintaining higher interest rates for an extended period.

Market Forecast: Cautiously Bullish

The market exhibits a cautiously bullish outlook, underpinned by the stability in Treasury yields, a buoyant tech sector, and expectations from the Federal Reserve’s imminent policy meeting. However, persistent inflation concerns and anticipation of the Fed’s rate decisions may introduce volatility, warranting careful monitoring in the short term.

Technical Analysis

E-mini Nasdaq-100 Index futures are edging higher on Monday, using the 50-day moving average at 17917.25 as springboard.

The short-term trend is down, it turned down on Friday when sellers took out three former bottoms. A trade through 18506.75 will change the short-term trend to up.

The intermediate-term support is being provided by the 50-day moving average at 17917.31 and the long-term uptrend is being supported by the 200-day moving average at 16466.37.

The short-term trend indicates choppy price action ahead. A failure to hold the 50-day moving average could trigger the start of a steep correction.