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Nasdaq Index, Dow Jones, S&P 500 News: Investors Bracing for Fed Decision, Inflation Data

By:
James Hyerczyk
Updated: Jun 11, 2024, 07:21 GMT+00:00

Key Points:

  • U.S. stock futures slip slightly as traders anticipate the Federal Reserve's upcoming interest rate decision and key inflation data this week.
  • Nvidia's shares jump 10%, pushing the company past a $3 trillion market capitalization for the first time, driven by strong AI demand.
  • Key stocks see significant premarket moves as KKR, CrowdStrike, and GoDaddy prepare to join the S&P 500 index, driving notable trading activity.
Dow Jones, Nasdaq-100, S&P 500 Index

In this article:

U.S. Stock Futures Edge Lower Ahead of Key Inflation Data and Fed Decision

U.S. stock futures experienced a slight decline on Monday following a week of gains, as traders geared up for the Federal Reserve’s interest rate decision and the release of May’s inflation data. Key market movements and corporate news dominated premarket trading, reflecting investor sentiments and expectations.

At 14:25 GMT, Dow Futures are trading 38794.00, down 63.00 or -0.16%. S&P 500 Index futures are trading 5347.25, down 8.50 or -0.16% and Nasdaq Composite futures are at 18998.25, down 39.50 or -0.21%.

Market Performance Recap

Last week saw positive momentum in the major averages, with the S&P 500 achieving a record intraday high on Friday. The index rose by 1.32%, while the Dow Jones Industrial Average gained 0.29%, and the Nasdaq Composite surged by 2.38%. Nvidia was a standout performer, advancing 10% and surpassing a $3 trillion market capitalization for the first time due to enthusiasm for its AI capabilities.

Stocks on the Move

Several stocks made notable moves in premarket trading. KKR, CrowdStrike, and GoDaddy saw significant gains as they prepared to join the S&P 500 index. Conversely, Robert Half, Comerica, and Illumina, set to leave the index, experienced declines. Notable movements also included AMD, which fell over 2% after a Morgan Stanley downgrade, and DraftKings, which rose 1.8% following a positive reiteration from the same firm.

JPMorgan Upgrades Walmart

In a strategic move, JPMorgan upgraded Walmart to overweight, projecting a potential 23% rally in the stock over the next 18 months. The upgrade was attributed to a desire to add more defensive stocks amid signs of softening discretionary spending and an uncertain economic outlook, including the presidential election cycle and holiday calendar impacts.

Key Economic Events

Investors are closely watching for the Fed’s rate decision and May’s consumer price index (CPI), both set for release on Wednesday. Economists expect a 3.4% annual rise in CPI, with a modest 0.1% monthly increase. Core CPI is projected to rise by 3.5% year-over-year. The Fed’s updated projections on rate cuts will also be crucial, with markets currently pricing in a single rate cut in November.

Market Forecast

Given the mixed signals from the labor market and inflation data, market sentiment remains cautious. While a dovish tilt could emerge from rising unemployment rates, strong labor demand growth may keep the Fed on a measured path. The upcoming data releases and Fed decision will be critical in shaping short-term market trends, with a potential for increased volatility based on the outcomes.

Daily E-mini S&P 500 Index

E-mini S&P 500 Index futures are edging lower on Monday. The orderly move suggests investors are pairing positions ahead of Wednesday’s CPI report and Fed announcements. If there had been surprise news earlier today, the selling pressure mood have been a little more pronounced.

Given the short-term range of 5205.50 to 5385.50, traders should anticipate a pullback into its pivot at 5295.50. A failure at this level could lead to a further decline into the 50-day moving average at 5221.50.

On the upside, a trade through 5385.50 will signal a resumption of the uptrend.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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