Nasdaq Index, Dow Jones, S&P 500 News: Lower Amid Mixed Earnings, Economic Data, Fed Speculations

Highlights

• Mixed corporate earnings impact stock market dynamics.
• Housing data exceeds expectations, indicating market strength.
• Federal Reserve’s potential policy shift influences investor sentiment.

U.S. Stock Market: Steady-to-Lower Amid Earnings and Economic Reports

The major U.S. stock index futures are inching lower shortly after the cash market opening on Friday, with investors aiming to continue the month’s positive trend.

At 15:00 GMT, the blue chip Dow Jones Industrial Average is trading 34936.82, down 8.65 or -0.02%. The benchmark S&P 500 Index is at 4506.24, down 2.00 or -0.04% and the tech-weighted Nasdaq-100 Index is at 14091.65, down 22.02 or -0.16%.

All three indices are tracking towards their third consecutive week of gains, with the S&P 500 and Nasdaq posting over 2% increases and the Dow close to a 1.9% rise this week.

Mixed Corporate Earnings

The stock market witnessed varied reactions to corporate earnings. Gap’s shares soared by 18% following stronger-than-expected third-quarter results. In contrast, ChargePoint’s shares plummeted 36% due to executive changes and a reduced revenue forecast.

Other notable movements included Alibaba’s U.S.-listed shares dropping 3.2% post-announcement of its cloud computing business strategy, BJ’s Wholesale Club shares dipping 4.6% due to revised sales forecasts, and Ross Stores’ shares climbing 6.3% after a favorable financial report.

Economic Data and Housing Market Strength

Economic reports revealed stronger-than-expected performance in the housing market. Housing starts and building permits for October surpassed expectations, indicating resilience in new housing construction. Housing starts hit a seasonally adjusted annual rate of 1.372 million, surpassing the Dow Jones estimate, while building permits reached 1.487 million.

Federal Reserve’s Influence and Treasury Yields

Recent tame U.S. inflation data have sparked optimism that the worst of inflation and the Federal Reserve’s strict rate policy might be easing. This sentiment is mirrored in the Treasury yields, with the 10-year yield slightly increasing and the 2-year yield rising after recent data suggested a possible easing of inflation. The producer price index showed a notable decline, and the consumer price index reading was lower than expected, fueling speculation about the Federal Reserve’s future rate hike decisions.

Market Outlook Amid Rate Cut Speculations

Investors are now speculating about a potential dovish pivot by the Federal Reserve, as recent negative data adds to the belief that the rate hiking cycle might be concluding. This speculation is reflected in the market’s expectations for more aggressive rate cuts by 2024, as evidenced by the movements in Treasury yields and the pricing in of rate cuts by the Federal Reserve’s December meeting. The anticipation of these policy changes is shaping market sentiment as investors wait to see if these forecasts materialize.

Technical Analysis

The E-mini Nasdaq-100 Index, currently at 15845.25, is trading above both its 200-day and 50-day moving averages, positioned at 14280.17 and 15115.79, respectively. This positioning suggests a bullish trend in the short and medium-term perspectives.

The index’s move below yesterday’s close at 15897.50, however, indicates a slight pullback in an otherwise upward trajectory.

With the current price surpassing the minor support level of 15717.75, it reinforces this level as a new pivot point, potentially setting a positive tone for the day’s trading. This price behavior, coupled with the positive relationship to key moving averages, generally points to a bullish market sentiment for the E-mini Nasdaq-100 Index.