Nasdaq Index, Dow Jones, S&P 500 News: Wall Street Mostly Lower Ahead of Fed Week

Key Points

• Major indexes show modest gains amid varied earnings reports.
• Intel’s guidance disappointment leads to significant share drop.
• Economic data suggests reduced recession fears, boosts market confidence.
• Investors preparing for start of Fed Week with rate cuts in focus. 

Overview

The major U.S. stock indexes are mixed but most lower on Friday, however, they are still poised to post solid weekly gains. The price action shortly after the cash market opening has been disappointing for bullish traders, following the release of the Fed’s favorite inflation gauge, the Core PCE Price Index.

At 15:00 GMT, the blue chip Dow is at 38076.28, up 27.15 or +0.07%. The benchmark S&P 500 Index is at 4890.38, down 3.78 or -0.08% and the tech-weighted Nasdaq-100 Index is trading 15472.75, down 37.75 or -0.24%.

Weekly Stock Market Overview

The stock market experienced a relatively stable week, with major indexes showing modest gains despite a mix of quarterly reports. As the trading week nears its end, the Dow, S&P 500, and Nasdaq Composite are all set to close higher. The Dow has seen a 0.5% increase, the S&P 500 climbed 1.1%, and the Nasdaq Composite leads with a 1.3% rise. Notably, the S&P 500 has been closing at fresh highs for five consecutive days, marking its longest streak since November 2021.

Impact of Corporate Earnings

Several major companies influenced market movements this week. Intel’s shares plummeted by 10% following its disappointing fiscal first-quarter guidance. Similarly, KLA Corp saw a more than 3% decline after announcing lower-than-expected revenue and earnings per share guidance. Visa also experienced a downturn, with shares dropping over 1% due to slowing U.S. volumes.

Key Stock Movements

American Express and T-Mobile were among the notable movers. American Express shares increased by 3% despite mixed fourth-quarter results, buoyed by strong full-year guidance. T-Mobile, however, declined by 2% after its mixed fourth-quarter performance. Norfolk Southern also retreated, falling more than 1% due to earnings that fell short of Wall Street expectations.

Economic Data and Market Outlook

The market received a boost from positive economic data, including December’s core personal consumption expenditures price index aligning with forecasts. This data, coupled with higher-than-expected GDP growth in the fourth quarter, has raised investor optimism, diminishing fears of a deep recession. Market analysts anticipate potential rate cuts in 2024, reflecting a cautiously optimistic outlook for the economy and stock market.

Short-Term Market Forecast

Given the current economic data and corporate earnings reports, the short-term market forecast appears cautiously bullish. While individual stock performances vary, the overall market trend, supported by positive economic indicators, suggests continued moderate growth in the near term. Don’t be surprised by a short-term pullback as we head into the Federal Reserve’s two-day meeting on January 30-31.

Technical Analysis

E-mini Nasdaq-100 Index futures are lower on Friday as investors take a breather following another week of solid gains. Although the market is in a robust uptrend, the daily chart suggests it may be sustceptible to a steep correction with the nearest support, the 50-day moving average, trailing at 16688.63.