Stock Futures Drop After S&P 500 Record Close
Stock futures fell on Friday after the S&P 500 reached its fourth consecutive record close. The Nasdaq Composite also ended at a record high, driven by optimism over cooling inflation. For the week, the S&P 500 is up 1.6%, and the Nasdaq has gained 3.1%. The Dow Jones Industrial Average, however, is down 0.4%.
At 12:20 GMT, Dow futures are trading 38779.00, down 299.00 or -0.77%. S&P 500 Index futures are at 5475.50, down 28.00 or -0.51% and Nasdaq futures are trading 19805.50, down 58.25 or -0.29%.
Movers and Shakers
Adobe, GameStop, Hasbro, RH, Boeing, and ZScaler
Adobe shares jumped 14% in premarket trading following strong Q2 earnings and raised full-year guidance. JPMorgan upgraded Adobe to overweight, citing a positive outlook. GameStop fell 1.1% after Keith Gill, known as “Roaring Kitty,” increased his stake, holding 9.001 million shares and over $6 million in cash.
Hasbro rose 1.7% after Bank of America upgraded it to buy from neutral, highlighting its digital gaming strategy as a driver for future earnings growth. In contrast, RH tumbled 12.3% after reporting a wider-than-expected Q1 loss of 40 cents per share, despite slightly exceeding revenue expectations with $727 million.
Boeing dropped over 1% following FAA investigations into counterfeit titanium use and a recent “Dutch roll” incident involving a 737 aircraft. ZScaler gained 2% after JPMorgan upgraded it to overweight, noting its status as a leading Zero Trust Network Security provider.
Economic News
Wholesale inflation unexpectedly decreased by 0.2% last month, contrary to expectations of a 0.1% increase. This follows a flat consumer price index reading for May. Investors are now looking ahead to the University of Michigan’s preliminary consumer sentiment index for June.
Dow Jones Price Forecast
Every new Dow Jones analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Dow Jones forecastsMarket Forecast
The market faces significant pressures from political uncertainties in France and the Bank of Japan’s decision to slow quantitative easing. Despite global monetary policy easing, it may not be enough to counter rising earnings headwinds. The Federal Reserve’s restrictive stance remains a concern, potentially creating jitters among investors.
The S&P 500’s high valuation at 21 times earnings indicates a market that might be overextended, though excluding top performers shows a more reasonable valuation. The key issue moving forward will be market breadth, the proportion of stocks advancing versus those declining. A broader base of rising stocks is necessary for sustained market strength. As inflation data remains mixed, the market’s direction will hinge on upcoming economic indicators and central bank policies. Traders should stay vigilant, as volatility could increase if inflationary pressures or political risks escalate.
Technical Analysis
E-mini S&P 500 Index futures are edging lower on Friday. The early price action suggests the market may be getting ready for a short-term correction. The short-term range is 5205.50 to 5519.50. This makes its 50% level at 5362.50 the next potential downside target.
On the upside, a trade through 5205.50 will signal a resumption of the uptrend.
