Stocks are striving hard to hold on to the momentum imparted by Nvidia Corp. (NASDAQ:NVDA)-fueled rally on Thursday, with futures pointing to a modestly higher start on Friday. As the June 1 deadline for a potential default looms large, traders may be cued to any development on the debt ceiling front. The Federal Reserve’s favorite inflation gauge — the core personal consumption expenditure is due to be released as part of the Commerce Department’s personal income and spending report ahead of the market opening.
Cues From Thursday’s Trading:
The U.S. markets closed mostly higher on Thursday, as Nvidia’s post-earnings rally spread cheer throughout the tech sector. The tech-heavy Nasdaq Composite Index and the S&P 500 Index snapped a two-session losing streak to close notably higher for the session.
The Dow Industrials extended its losses for a fourth straight session and hit a fresh one-month low, as energy and defensive sectors dragged the 30-stock blue-chip average modestly lower.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq Composite | +1.71% | 12,698.09 | |
| S&P 500 Index | +0.88% | 4,151.28 | |
| Dow Industrials | -0.11% | 32,764.65 |
Analyst Color:
Signals from either side of the aisle point to a potential resolution for the debt ceiling impasse, said Quincy Crosby, chief global strategist at LPL Financial.
He sees House Speaker Kevin McCarthy’s (R-Calif) not “everybody is going to be happy at the end of the day” comment as a positive.“Political ‘horse trading,’ the basis for successful negotiating, demands that both sides are left with complaints, not one side or the other,” the analyst said.
“This, coupled with reports that the sides are working late into the night and returning each other’s calls has only added to the cautious optimism that a deal is the offing.”
The analyst sees positive sentiment out of Nvidia’s earnings, Best Buy, Inc.’s (NYSE:BBY) upbeat results and headlines pointing to debt ceiling resolution to “finally help lift a broader underpinning of the market.”
Futures Today
| Index | Performance (+/-) | |
|---|---|---|
| Nasdaq 100 Futures | +0.32% | |
| S&P 500 Futures | +0.16% | |
| Dow Futures | +0.14% | |
| R2K Futures | -0.14% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) fell 0.13% to $415.18, while the Invesco QQQ ETF(NASDAQ:QQQ) edged up 0.33% at $340.84, according to Benzinga Pro data.
Upcoming Economic Data:
The Bureau of Economic Analysis is due to release the personal income and spending report for April at 8:30 a.m. EDT. The consensus estimate calls for 0.4% month-over-month increases each for personal income and spending. In March, personal income grew 0.3% and personal spending was unchanged. Economists expect the monthly and annual rates of the core PCE Index to remain unchanged at 0.3% and 4.6%, respectively.
The Commerce Department will release its durables goods orders report for April at 8:30 a.m. EDT. The headline durable goods orders may have fallen 1% month-over-month following a 3.6% increase in March. Core durable goods orders, which exclude the volatile transportation orders, are expected to remain unchanged following a 0.3% increase in March.
The University of Michigan’s final consumer sentiment index for May is due at 10 a.m. EDT. Economists expect the preliminary consumer sentiment index to be revised 0.2 points higher to 57.9 in May, but come in sharply lower than April’s 63.5. The one-year and five-year inflation expectations, which are part of the survey, may also evince some interest.
See also: How To Trade Futures
Stocks In Focus:
- Marvell Technology, Inc. (NASDAQ:MRVL) jumped over 16.6% in premarket trading following the release of its earnings report.
- Other stocks moving in reaction to their quarterly results are Gap, Inc. (NYSE:GPS) (up nearly 12%), Workday, Inc. (NASDAQ:WDAY) (up over 8%) and Ulta Beauty, Inc. (NASDAQ:ULTA) (down over 8%).
- Paramount Global (NASDAQ:PARA) rose over 8% after Wall Street Journal said the company’s controlling shareholder, Shari Redstone’s National Amusements, secured a $125 million investment from merchant bank BDT & MSD Partners,
- Big Lots, Inc. (NYSE:BIG), Hibbett, Inc. (NASDAQ:HIBB), PDD Holdings, Inc. (NASDAQ:PDD), Catalent, Inc. (NYSE:CTLT) and Buckle, Inc. (NYSE:BKE) are among the companies reporting results before the market opens.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 0.75% to $72.37 a barrel in early European trade on Friday, thus reversing partly the 3.38% losses they incurred in the previous session.
The yield on the benchmark 10-year Treasury note fell 0.032 percentage points to 3.783%.
Most major Asian markets advanced on Friday, capitalizing on the positive sentiment from Wall Street overnight. The New Zealand market, however, fell sharply and the Indonesian and Singaporean markets ended marginally to modestly lower. The Hong Kong market was closed for a public holiday.
European stocks showed tentativeness in late-morning trading.
Read Next: Value Stocks Hit 15-Month Low Against Growth As AI Fuels Tech’s Vengeance Over 2022’s Rate-Hike-Induced Market Fall
