Nasdaq Index, Dow Jones, S&P 500 News: Mixed Earnings Impacting Ahead of PCE Report

U.S. stock market futures are experiencing a slight decline early Thursday as we approach the end of February, a month marked by notable gains across major indexes. This trend reflects investor reactions to the latest earnings reports and anticipation of key economic data.

At 12:59 GMT, Dow futures are trading 38874.00, down 119.00 or -0.31%. S&P 500 Index futures are at 5067.25, down 13.75 or -0.27% and Nasdaq-100 Index futures are at 17869.75, down 45.50 or -0.25%.

Earnings Overview

Recent earnings have shown mixed impacts on stock movements. Salesforce reported a minor drop due to subdued revenue projections, and Snowflake experienced a significant decline following the announcement of its CEO’s retirement and lackluster product revenue guidance. Conversely, Okta surged after reporting strong results.

Best Buy also exceeded expectations in its holiday quarter earnings despite a challenging consumer electronics market. However, the company anticipates a revenue decline in the coming fiscal year, mainly attributed to a shorter operational year.

Best Buy’s CEO emphasized efforts towards stabilizing industry sales and improving the operating income rate, partly through modifications to its membership program.

Economic Data Anticipation

Investors are eagerly awaiting the personal consumer expenditures (PCE) report, a crucial inflation measure. Expectations are set for a 0.3% monthly increase and a 2.4% annual rise. A higher-than-anticipated figure could negatively impact equities, reinforcing concerns about persistent inflation and the possibility of sustained high Treasury yields. This data release follows other significant economic indicators, including personal income and purchasing managers index data, as well as pending home sales figures.

Short-term Market Forecast

Considering the mixed earnings results and the anticipation surrounding the PCE report, the short-term market outlook appears cautious. While the major indexes have shown resilience with consecutive monthly gains, the upcoming PCE data could be pivotal.

A higher PCE reading may confirm fears of enduring inflation, potentially leading to a bearish sentiment in the short term. This could result in increased market volatility and pressure on equities, especially if the data suggests a continuation of the Federal Reserve’s aggressive interest rate policy.

Technical Analysis

E-mini S&P 500 Index futures are drifting lower on Thursday. The price action suggests that investors are waiting for the next catalyst to trigger a resumption of the uptrend on a trade through the all-time high at 5123.50.

While “the trend is your friend” attitude is very optimistic, investor have to face the possibility that the index is running a little to hot at this time, which makes it vulnerable to a near-term correction into the 50-day moving average at 4907.68.