NASDAQ 100, Dow Jones, S&P 500: Dow’s 9-Day Rally Sparks Optimism Despite Earnings Hurdles

Highlights

• US stock index futures show positive momentum after Dow Jones’ impressive winning streak.
• CSX and Knight-Swift face challenges as earnings reports disappoint Wall Street.
• Mixed after-hours trading reveals varied performance among major indices.

Overview

The major US stock index futures showed positive momentum on Friday morning following the Dow Jones Industrial Average’s impressive nine-day winning streak. However, transportation giants CSX and Knight-Swift faced challenges in extended trading after their earnings reports failed to meet Wall Street’s expectations.

At 08:30 GMT, blue chip Dow futures are trading 35432.00, up 31.00 or +0.09%. Benchmark S&P 500 Index futures are at 4572.75, up 7.25 or +0.16% and tech-heavy Nasdaq futures are trading 15645.50, up 53.25 or +0.34%.

CSX, Intuitive Surgical On the Move Early

CSX, the transportation company, experienced a 5% drop in stock value as it missed revenue projections for the second quarter. Analysts polled by Refinitiv had estimated revenue to be $3.74 billion, but CSX’s actual revenue stood at $3.7 billion. On the bright side, the company’s earnings per share for the quarter met expectations at 49 cents.

Similarly, the health-care stock Intuitive Surgical saw a 4.7% decline after reporting lower-than-anticipated systems unit revenue, despite beating earnings expectations. In contrast, the publisher Scholastic saw an 8% surge in stock value after surpassing expectations for earnings per share and announcing a $100 million increase in its share repurchase amount.

Earnings Season Mostly Positive

This earnings season has been predominantly positive, with approximately 73% of S&P 500 companies surpassing analysts’ expectations, according to FactSet data.

Nevertheless, the after-hours trading saw a mix of movement, with the S&P 500 and Nasdaq Composite experiencing losses of around 0.7% and 2% respectively, while the Dow Jones stood out with a gain of nearly 164 points or 0.5%, extending its winning streak to nine days—the longest since 2017. The Dow’s success can be attributed to strong results from Johnson & Johnson, although Netflix and Tesla’s disappointing earnings weighed on the other two indexes during the session.

The mixed performance of the broader indices reflects the varied earnings and economic data released recently. Across various industries, there is a noticeable increase in selling pressure triggered by the revealed earnings results.

As the week comes to a close, the Dow and S&P 500 are expected to finish with gains of approximately 2.1% and 0.7% respectively. On the other hand, the Nasdaq is likely to end with a 0.4% decline, depending on how Friday’s session unfolds.

Short-term Outlook:  Fighting Through Challenges

In conclusion, despite some individual stocks facing challenges, the overall market sentiment remains positive, and the US stock index futures are heading towards a promising trend. Investors should closely monitor the ongoing earnings reports and economic indicators for further insights into the market’s trajectory.