S&P 500 Steady: AMD Rises 3% After Acquisition as Market Awaits Fed Signals

Stock Futures Steady After S&P 500’s Strongest Week of 2024

U.S. stock futures showed little movement on Monday following the S&P 500’s best weekly performance of 2024. Investors are cautiously optimistic after a volatile period, with major indices showing significant gains last week. The S&P 500 surged 3.9%, the Nasdaq Composite rose by 5.2%, and the Dow Jones Industrial Average climbed 2.9%, marking a strong recovery after early August turmoil.

At 12:38 GMT, Dow Futures are trading 40810.00, up 16.00 or +0.04%. S&P 500 Index Futures are at 5584.50, up 6.25 or +0.11% and Nasdaq 100 Futures are trading 19634.75, up 29.00 or +0.15%.

Economic Data Calms Recession Fears

Earlier in August, disappointing economic data stoked fears of a potential recession and concerns over the Federal Reserve’s handling of interest rates. This led to a global sell-off, with the S&P 500 recording its worst day since 2022 on August 5. However, last week’s positive economic indicators helped ease market anxiety. Better-than-expected retail sales figures, lower initial jobless claims, and robust earnings from major companies like Walmart contributed to renewed investor confidence.

Adding to this optimism was the latest consumer price index (CPI) data, which showed a 12-month inflation rate of 2.9% in July—the lowest in over three years. This slowdown in inflation has fueled hopes that the U.S. economy could achieve a “soft landing,” avoiding a severe downturn.

Key Premarket Movers: AMD, Estée Lauder, and Others

Several stocks were active in premarket trading. AMD saw its shares rise nearly 3% following the announcement of its $4.9 billion acquisition of ZT Systems. In contrast, Estée Lauder dropped 4% after issuing a disappointing earnings outlook, raising concerns about its near-term performance.

Dutch Bros, a popular coffee chain, fell nearly 4% after a downgrade from Piper Sandler, while Lineage, a warehousing firm, edged up 1% on positive analyst coverage from Morgan Stanley. Homebuilder Taylor Morrison Home also gained 1.5% following an upgrade by BTIG, which cited the company’s strong long-term prospects.

Goldman Sachs Lowers Recession Forecast

Goldman Sachs reduced its U.S. recession forecast from 25% to 20%, reflecting improved market sentiment after last week’s rally. The firm had previously increased the probability to 25% from 15% earlier in the month due to recession fears. Despite the downgrade, Goldman expects continued volatility in the markets for the remainder of the year.

Market Outlook: Cautious Optimism Ahead of Fed Signals

Looking ahead, Wall Street’s focus will be on Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium on Friday. Traders will also closely monitor the minutes from the Fed’s latest meeting, due on Wednesday, for clues on the future path of interest rates. While the market sentiment is generally bullish, analysts caution that mixed economic data could continue to fuel the recession debate, keeping volatility elevated in the coming months.

Technical Analysis

E-mini S&P 500 Index futures are marginally higher during the pre-market session on Monday as traders prepare to challenge the August 1 main top at 5600.75. Taking out this level could trigger an acceleration to the upside with investors setting their sights on the all-time high at 5721.25.

On the downside, the nearest and best support is the 50-day moving average at 5517.50. If this fails then look for momentum to shift with 5420.50 the next target.