Nasdaq 100, Dow Jones, S&P 500 News: Strong Performances, Bullish Outlook Prevail

Performance

Wall Street’s major stock indexes edged higher on Wednesday, led by the Dow, amidst thin trading before pivotal economic data, Federal Reserve commentary, and an extended holiday weekend. The Dow and the S&P 500 struggled to maintain upward momentum in the previous session, following three consecutive declines. Despite this, all three major U.S. stock indexes are eyeing quarterly gains, buoyed by an artificial intelligence-driven rally that recently propelled Wall Street to record highs.

At 14:46 GMT, the Dow Jones Industrial Average is trading 39526.86, up 244.53 or +0.62%. The S&P 500 Index is at 5219.51, up 15.93 or +0.31% and the Nasdaq Composite is trading 16325.70, up 10.01 or +0.06%.

Fed Comments

Investors awaited remarks from Fed Board Governor Christopher Waller, scheduled to speak at the Economic Club of New York. Speculation suggests Waller may offer a contrasting view to Fed Chair Jay Powell’s dovish stance, possibly citing robust U.S. aggregate demand and persistent inflation as reasons to expect fewer rate cuts than currently anticipated. Market sentiment suggests a 70% likelihood of the Fed initiating its easing cycle in June, according to the CME FedWatch tool.

Economic Reports

The release of the Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation measure, is scheduled for Good Friday when the U.S. stock market will be closed. An upside surprise in inflation could potentially temper market optimism surrounding early rate cuts. Additionally, investors are anticipating the final fourth-quarter GDP data, the University of Michigan’s consumer sentiment reading, and weekly jobless claims figures.

Stocks on the Move

Notable performers in the S&P 500 included Cintas, up 8% following better-than-expected earnings, and Merck, up nearly 5% to a new all-time high, following FDA approval for its pulmonary arterial hypertension treatment. On the Dow, Merck & Co rose 4.6% after FDA approval for its therapy targeting high blood pressure due to lung artery constriction. Meanwhile, Trump Media & Technology Group surged 18.3% following its successful Nasdaq debut, while Robinhood Markets climbed 4.6% post the launch of a new credit card. Conversely, GameStop plunged 14.6% after reporting lower fourth-quarter revenue and job cuts to reduce costs.

Forecast: Bullish

Despite recent volatility, the overall market sentiment remains positive, with ongoing optimism surrounding potential Federal Reserve interest rate cuts and strong corporate performances. Technical indicators suggest continued bullish momentum in the short term. However, investors should remain cautious and closely monitor key economic data releases for potential shifts in market sentiment.

Technical Analysis

E-mini S&P 500 Index futures are edging higher as we approach the mid-session on Wednesday as investors try to bring an end to the current 3-day losing streak.

None-the-less, the benchmarket remains in an uptrend as determined by a rising wedge chart formation on the daily chart and its relationship to the 50-day and 200-day moving averages.

The nearest support is the bottom of the wedge at 5243.75. A failure to hold this support will be a sign of weakness. This could lead to a test of the 50-day moving average at 5112.45.