Nasdaq 100, Dow Jones, S&P 500 News: Tech Sector Surge Led by Nvidia, Easing Inflation Optimism

Stock markets are higher shortly after the opening on Thursday, driven by positive sentiment over easing inflation and technology sector gains, leading to a notable recovery from earlier weekly losses.

Market Performance

The Dow Jones Industrial Average is up by 0.54%, while the Nasdaq Composite and S&P 500 increased by 1.11% and 0.88% respectively. This surge was fueled by optimism following the European Central Bank’s (ECB) lowered inflation and growth forecasts, despite holding interest rates steady. This development, combined with Federal Reserve Chair Jerome Powell’s remarks about potential rate decreases, enhanced investor confidence.

Corporate Movements

In corporate news, contrasting fortunes were observed. Victoria’s Secret shares plummeted by 28% due to mixed results and unimpressive guidance. Conversely, Novo Nordisk experienced a nearly 9% rise following successful obesity treatment trials. Nvidia, a key player in the tech industry, saw its shares rise over 10% for the week, countering Apple’s nearly flat performance. Additionally, New York Community Bancorp witnessed a dramatic 14% increase after announcing a significant capital raise.

Labor Market and Layoff Concerns

Investors’ attention is also on the upcoming U.S. jobs report, which will provide insights into the labor market’s resilience amidst higher interest rates. However, concerns are mounting due to the highest level of layoffs for February since 2009, as reported by Challenger, Gray & Christmas, with the technology sector leading the cuts.

Market Outlook

Despite the optimism, mixed signals persist. Fed Governor Michelle Bowman expressed that it’s premature for rate reductions, contrasting with the broader market expectation of a future rate cut. The unchanged unemployment claims and the forthcoming nonfarm payrolls report will be critical in shaping the short-term market forecast.

Short-Term Market Forecast

Given the current market conditions and upcoming economic data, the short-term outlook appears cautiously bullish. The technology sector’s resilience, combined with hopeful signals regarding interest rate cuts, are positive indicators. However, this optimism is tempered by ongoing concerns about labor market strength and the mixed corporate performance, warranting close monitoring of the forthcoming labor market data for a clearer direction.

Technical Analysis

The trend is up. The uptrend resumed on Thursday when buyers took out the previous main top at 5157.75. The short-term trend will change to down on a trade though 5060.00.

The major support is the uptrending 50-day moving average at 4941.84.