Nasdaq Index, Dow Jones, S&P 500 News: Wall Street Taking Earlier Breather After Milestone Session

Dow Futures Nearly Flat After Brief Surge Above 40,000

Futures tied to the Dow Jones Industrial Average traded nearly flat on Friday, following a day of notable highs. On Thursday, the Dow briefly surpassed the 40,000 mark for the first time, hitting an intraday high of 40,051.05 before closing down 0.1%. The S&P 500 and Nasdaq Composite also experienced minor declines, ending Thursday down 0.2% and 0.3% respectively. Despite the subdued end to the session, all three indexes are set to finish the week with gains.

At 11:25 GMT, Dow futures are trading 39988.00, down 22.00 or -0.05%. S&P 500 Index futures are trading 5318.25, down 2.00 or -0.04% and Nasdaq 100 Index futures are at 18655.75.

Index Performance and Weekly Gains

The Nasdaq Composite is leading this week’s gains with a 2.2% rise, followed by the S&P 500’s 1.4% increase. The Dow is on track to close the week 0.9% higher. This week’s performance has pushed the indexes into positive territory for the second quarter, with the S&P 500 and Nasdaq each up more than 11% in 2024, and the Dow rising over 5% year-to-date.

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Yields and Economic Data

U.S. Treasury yields remained steady on Friday. The 10-year Treasury yield increased by over 2 basis points to 4.4%, while the 2-year yield edged up to 4.795%. Investors are assessing recent economic data and comments from Federal Reserve officials. Thursday’s data revealed a 0.9% rise in import prices, surpassing estimates, and initial jobless claims that aligned with expectations.

Inflation readings for April showed a 0.3% monthly increase in the consumer price index, and a 3.4% year-over-year rise. While the monthly figure was slightly below forecasts, the annual rate met expectations. Atlanta Fed President Raphael Bostic noted satisfaction with the progress on inflation but urged patience and vigilance from the Fed.

Market Forecast

The Dow’s recent ascent reflects optimism around interest rates, artificial intelligence advancements, and corporate earnings growth. Despite Thursday’s pullback, long-term investment in high-quality stocks remains a recommended strategy for building wealth. Investors will closely monitor leading indicators due on Friday and additional comments from Fed officials in the coming week to gauge the market’s direction.

Expectations remain cautious as the market navigates through economic data and policy signals, with no significant earnings reports anticipated on Friday as the earnings season concludes.

E-mini Dow Jones futures are taking an early breather on Friday, shortly before the cash market opening. While the Dow Jones Industrial Average cash market posted a new all-time high on Thursday, the futures contract continues to lag with investors facing resistance at 40358.

On the downside, minor support at 39405 is a potential trigger point for an acceleration into the intermediate support or 50-day moving average at 39119.

Long-term bullish traders see the divergence between futures and cash as an anomoly. However, some traders may see it as a reason to book profits. Prepare for heightened volatility over the near-term.