Nasdaq Index, Dow Jones, S&P 500 News: Futures Rally Amid Fed Rate Cut Speculation, Strong Energy Sector

U.S. Stock Futures Rise Amid Fed’s Rate Cut Speculation

U.S. stock futures are climbing on Thursday, rebounding after the Dow Jones Industrial Average endured its third consecutive day of losses. The main trading session on Wednesday witnessed a minor slip in the Dow, while the S&P 500 and Nasdaq Composite saw marginal gains.

At 12:15 GMT, Dow Jones futures are trading 39575.00, up 93.00 or +0.24%. The S&P 500 Index is at 5282.50, up 6.00 or +0.30% and Nasdaq Futures are trading 18450, up 76.75 or +0.42%.

Fed’s Influence on Market Sentiment

Investor concerns over prolonged higher interest rates weighed on stocks this week, driven by Federal Reserve Chairman Jerome Powell’s cautious remarks. Powell emphasized the need for concrete evidence of inflation nearing the central bank’s 2% target before considering rate adjustments. Atlanta Fed President Raphael Bostic echoed this sentiment, hinting at the possibility of only one rate cut, leading to a downward revision in market expectations for rate reductions at the Fed’s June meeting.

Stocks on the Move

Several stocks witnessed notable movements:

• Hertz Global and Block faced downward pressure following analyst downgrades, citing near-term pressures.
• Zeta Global surged post an upgrade, driven by positive revisions and strong fundamentals.
• Wayfair experienced a boost following an upgrade, highlighting potential market share gains amidst a recovering home furnishing sector.
• Levi Strauss and Conagra Brands reported strong earnings, driving their respective stock prices higher.
• Intuitive Machines soared after securing a NASA contract for a lunar terrain vehicle, indicating positive prospects in the space sector.

Sector Performance: Energy Sector Shines

The S&P energy sector closed at a record high, supported by a 0.66% gain, marking its first record close since June 2014. The surge in the energy sector, up nearly 16% in 2024, is fueled by rising crude oil futures amid geopolitical tensions and OPEC+ policies.

Economic Indicators and Job Market Trends

While the job market showed resilience with a robust addition of 184,000 workers in March, planned job cuts surged to their highest level since January 2023, posing potential challenges despite sectoral variations.

Short-Term Market Forecast: Bullish Rotation and Economic Data Watch

Despite short-term volatility, the equity market displays signs of a bullish rotation, diversifying growth beyond tech giants. Investors await crucial economic data releases, including initial jobless claims and the U.S. trade deficit for February, with Friday’s release of March’s nonfarm payrolls drawing significant attention.

In conclusion, while uncertainties persist, the market anticipates positive shifts, driven by evolving economic conditions and sector-specific performances.

Technical Analysis

E-mini Dow Futures are edging higher on Thursday, slightly above the 50-day moving average at 39327. This indicator is controlling the intermediate trend.

A failure to hold the 50-day moving average will signal a significant shift in investor sentiment. Traders should pay close attention to trader reaction of this major indicator.