Nasdaq 100, Dow Jones, S&P 500 News: Tech Sector Leads Gains as Inflation Report Meets Expectations

February Inflation Report Aligns with Forecasts

U.S. stock index futures are trading higher shortly after the cash market opening, following the release of the February inflation report, which closely matched consensus estimates.

At 14:27 GMT, the Dow Jones Industrial Average is trading 38936.50, up 166.54 or +0.43%. The S&P 500 Index is at 5154.13, up 36.19 or +0.71% and the Nasdaq-100 Index is trading 16161.96, up 142.68 or +0.89%.

The consumer price index (CPI) rose 0.4% in February, totaling a 3.2% year-over-year increase. Core inflation, excluding food and energy, also saw a 0.4% rise, slightly above expectations.

Tech Stocks and Earnings Reports Drive Market

Technology stocks showed notable growth after the inflation data release. Key players such as Nvidia, Microsoft, and Oracle demonstrated significant gains, with Oracle surging over 9% post its earnings beat. The overall market sentiment appears cautiously optimistic, as factors like inflation, earnings, and interest rates display favorable trends.

Mixed Performances

Among Stocks Oracle’s stock leaped by 13.3% due to robust per-share earnings, while On Holding faced a more than 14% drop after its quarterly results fell short of expectations. Kohl’s shares increased by 2.2% after reporting earnings and revenue surpassing estimates. These varied stock performances reflect a complex market environment.

Boeing’s Challenges Impact Southwest Airlines

Southwest Airlines announced a cut in its capacity plans and a reevaluation of its 2024 financial forecasts, citing Boeing delivery delays. The airline anticipates receiving fewer Boeing 737 Max 8 planes than initially expected. This development, coupled with weaker-than-anticipated leisure bookings, led to a 12% decrease in Southwest’s share price.

Inflation Trends and Federal Reserve Outlook

The alignment of February’s CPI with projections indicates a continued yet gradual easing of inflation, which remains above the Federal Reserve’s 2% target. The market anticipates the Fed might delay interest rate cuts, with predictions centering on a potential cut by June, subject to jobs market performance and inflation trends.

Short-Term Market Forecast

The U.S. stock market currently exhibits a bullish tendency, buoyed by aligning inflation data and robust technology sector performances. However, caution is advised due to varying stock responses and potential adjustments in Federal Reserve policies, depending on upcoming economic indicators and inflation trends.

Technical Analysis

Nasdaq-100 Index futures are recovering on Tuesday after a two-day setback.

The short-term trend is up. A trade through 18076.25 will change the short-term trend to down. This could trigger a sharp break into the intermediate trend indicator, the 50-day moving average at 17811.22.

A trade through 18691.25 will signal a resumption of the uptrend.