Nasdaq 100, Dow Jones, S&P 500 News: Stock Markets Rebound Despite Inflation Worries

James Hyerczyk
Updated: May 26, 2024, 13:06 GMT+00:00

Key Points:

  • Major U.S. stock indexes opened higher Friday, recovering from Thursday's steep losses driven by inflation concerns.
  • Workday drops over 10% after lowering subscription revenue guidance, while Deckers Outdoor surges 11% on earnings beat.
  • Durable goods orders rise 0.7% in April, beating forecasts and boosting market sentiment despite inflation worries.
Nasdaq Composite, S&P 500, Dow Jones

In this article:

U.S. Stock Markets Rebound Amid Persistent Inflation Concerns

The main U.S. stock indexes opened higher on Friday, rebounding after Wall Street closed lower on Thursday due to persistent inflation concerns. The positive start follows the worst session in over a year for the Dow Jones Industrial Average.

Index Performance

At 13:48 GMT, the Dow Jones Industrial Average is up 73 points, or 0.19%, while the S&P 500 and Nasdaq Composite each gained 0.4%. Despite the rebound, the S&P 500 is tracking for a weekly loss of 0.7%, and the Dow is on pace to drop about 2.4%. The Nasdaq is the outperformer with a modest gain of 0.3%, but the Dow is set to snap a five-week winning streak and the S&P 500 to break a four-week positive streak.

Individual Stocks

Workday shares fell more than 10% after the company reduced its subscription revenue guidance for the full year. Intuit also dropped 8.3% on weak forward guidance, forecasting adjusted earnings below analysts’ expectations. In contrast, Deckers Outdoor surged 11% after posting earnings and revenue that beat estimates, and Ross Stores added over 7% on strong earnings.

Economic Data

Robust economic data dented investors’ hopes for rate cuts from the Federal Reserve. The Commerce Department reported that demand for durable goods rose 0.7% in April, beating expectations of a 1% decline. Excluding transportation items, orders accelerated by 0.4%. Additionally, services and manufacturing data for May surpassed forecasts, and weekly jobless claims suggested a stable labor market.

Nvidia’s Influence

During Thursday’s session, Nvidia gained over 9% due to strong guidance and an earnings beat, along with a 10-for-1 stock split. Despite Nvidia’s performance, the broader market ended lower, indicating that even major players like Nvidia cannot counteract Federal Reserve policies. Nvidia traded marginally lower on Friday.

Market Forecast

Despite Friday’s rebound, the market sentiment remains cautious. Inflationary pressures and robust economic data suggest that the Federal Reserve is unlikely to cut interest rates soon. This cautious outlook is expected to weigh on market performance in the short term, with potential for continued volatility as traders assess economic indicators and Fed policy signals.

Technical Analysis

Daily E-mini S&P 500 Index

Although it is still in an uptrend according to the short-term, intermediate-term and long-term trend indicators, the E-mini S&P 500 Index appears to be vulnerable to the downside with the 50-day moving average at 5211.80 the next major target.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

Did you find this article useful?