Nasdaq Index, Dow Jones, S&P 500 News: Tech Shares Rebounding Amid Nvidia Resilience

Key Points

• Dow, S&P 500, Nasdaq Rebound After Inflation-Induced Drop
• Robinhood Rises, Lyft Excels, Airbnb Declines in After-Hours
• NVDA Shows Resilience Amidst Market Fluctuations

Market Overview

U.S. stock futures are modestly higher Wednesday following a sharp decline in major indices. The Dow Jones Industrial Average experienced its most significant drop since March 2023 on Tuesday, falling 1.35%. The S&P 500 and Nasdaq Composite also faced setbacks, declining 1.37% and 1.8%, respectively. This downturn was largely triggered by a higher-than-expected inflation report, causing concerns about the Federal Reserve’s interest rate plans.

At 11:48 GMT, Dow Futures are trading 38385.00, up 52.00 or +0.14%. S&P 500 Index Futures are at 4986.25, up 15.00 or +0.30% and Nasdaq-100 Index futures are trading 17759.25, up 82.50 or +0.47%.

After-Hours Stock Movements

In extended trading, Robinhood Markets surged 9.5% post a surprising earnings and revenue beat, outperforming the loss anticipated by analysts and reporting significant revenue gains. Meanwhile, Lyft’s shares soared 18.5% after announcing robust fourth-quarter results and upbeat guidance, exceeding analysts’ earnings estimates. In contrast, Airbnb’s shares dipped over 5% despite exceeding revenue expectations.

Economic Indicators

January’s consumer price index indicated a 0.3% monthly rise and a 3.1% annual increase, surpassing economists’ predictions. Today, the market awaits comments from Chicago Fed President Austan Goolsbee. Earnings reports from key companies like Generac, Kraft Heinz, Cisco Systems, and Occidental Petroleum are also on the horizon.

AI Stock Cautions

Jeremy Grantham of GMO warned investors about the excessive enthusiasm surrounding AI stocks, likening the situation to previous tech and railroad stock bubbles. He suggests a cautious approach, anticipating a phase of adjustment for these stocks.

Market Outlook

Despite January’s CPI report possibly delaying a Fed rate cut to the latter half of 2024, market optimism persists. The recent pullback is seen as a realignment of valuations with fundamentals, presenting a potential entry point for value-focused investors. With inflation, interest rates, and earnings still favorable, a prolonged downturn seems unlikely. However, the market’s reaction to the recent CPI report indicates sensitivity to inflationary pressures, with varied impacts across different sectors and companies.

Pre-Market Trends

Interestingly, despite the general downturn, certain high-demand stocks like NVDA showed resilience, with only minor losses and a pre-market uptick. This trend suggests a selective investor response, focusing on long-term potential over short-term fluctuations.

Technical Analysis

E-mini Nasdaq-100 Index futures are attempting to rebound on Wednesday, following yesterday’s steep sell-off. The significant plunge, which did not change the trend to down, stopped between 50% and 61.8% of the short-term range bordered by the January 31 bottom at 17221.50 and the February 12 top at 18121.50.

The uptrend will resume if buyers can overcome 18121.50, however, a failure to hold 17542.00 could trigger a further decline into the 50-day moving average at 17083.83.