Nasdaq 100, Dow Jones, S&P 500 News: Technology, Growth Stocks Rally, Tracking Powell’s Optimism

Supported by Powell’s Optimistic Remarks

Wall Street’s major stock indices are trading higher as we near the mid-session on Wednesday, influenced by Federal Reserve Chair Jerome Powell’s optimistic remarks about reducing interest rates later this year. This sentiment was echoed across various sectors, particularly in technology and growth stocks.

At 16:00 GMT, the Dow is trading 38828.45, up 243.36 or +0.63%. The S&P 500 Index is at 5119.20, up 40.55 or +0.80% and the Nasdaq-100 Index is trading 16068.76, up 129.18 or +0.81%.

Market Response to Powell’s Remarks

Jerome Powell’s congressional testimony, where he indicated a potential reduction in interest rates, spurred positive movements across Wall Street. This announcement led to gains in most megacap growth and technology stocks, with notable performances from companies like Nvidia. The decrease in Treasury yields following Powell’s comments also played a role in this uplift.

Inflation and Rate Cuts

Powell acknowledged the substantial ease in inflation since its peak in 2022. However, he stressed the need for more confidence in its continued decline before any rate cuts. Traders, interpreting these signals, now foresee a higher likelihood of the first rate cut in June, shifting from an earlier expectation of March, as per the FedWatch tool.

Employment and Economic Indicators

U.S. private payroll data showed a slight underperformance against expectations in February, with an addition of 140,000 positions. This figure, although an improvement from January, fell short of the Dow Jones estimate. The upcoming nonfarm payrolls report is anticipated to provide further insights into the labor market’s condition.

Noteworthy Stock Movements

Several companies witnessed significant stock movements. JD.com’s shares jumped following a revenue report exceeding estimates and an expanded share repurchase program. Cryptocurrency-related firms like Coinbase Global and MicroStrategy also saw substantial gains. CrowdStrike Holdings, on the other hand, surged due to optimistic annual forecasts driven by increased enterprise spending on cybersecurity.

Market Sentiment

The overall market sentiment was positive, with advancing issues significantly outnumbering decliners on both the NYSE and the Nasdaq. The S&P index and Nasdaq recorded new highs, indicating robust market confidence.

Market Forecast

The current market trend is bullish, driven by positive signals from the Federal Reserve and strong performances in key sectors. While inflation concerns persist, the anticipated easing of rates and resilient sector performances, particularly in technology and cybersecurity, suggest a continued upward trend in the short term. However, upcoming economic reports, especially on employment, will be crucial in maintaining this optimism.

Technical Analysis

E-mini S&P 500 Index futures continue to climb as we approach the mid-session, building on the earlier pre-market session gains. The first upside target is yesterday’s high at 5135.50, followed by the all-time high at 5157.75. Taking out this level will signal a resumption of the uptrend.

On the flip-side, a trade through 5060.00 will change the short-term trend to down. This move will put the uptrending 50-day moving average at 4935.21 on the radar.