The Market News Today: S&P500 Futures Climb as Investors Await Crucial Inflation Report

Stock Futures Rise as Investors Await Key Inflation Data

Stock futures advanced Friday morning, contrasting with expected weekly losses across major averages. Investors are anticipating the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) report. R

ecent trading sessions have seen a shift away from megacap tech and AI stocks towards small caps and cyclical sectors. This rotation, coupled with after-hours movements in stocks like Dexcom and Deckers, highlights the market’s current volatility. Alongside the inflation data, traders will be watching the Michigan sentiment survey and earnings reports from several major companies.

Tech Giants Lead Communication Services Sector to Worst Week Since 2023

The communication services sector is heading for its worst weekly performance since October 2023, with a 4.63% decline. Tech giants like Alphabet and Meta Platforms are driving the losses.

The information technology sector is also struggling, down 3.5% for the week, with significant drops in CrowdStrike and Nvidia.

In contrast, defensive sectors like health care and utilities are the only positive performers in the S&P 500 this week, highlighting a shift in investor sentiment away from tech-heavy sectors.

After-Hours Trading: Deckers Soars, Dexcom Plunges on Earnings Reports

Several companies made headlines in after-hours trading due to earnings reports. Deckers Outdoor surged 8% after beating expectations, while Dexcom plummeted over 35% following reduced guidance.

Boston Beer Company slipped 5% on missed estimates. Coursera jumped 16% despite a per-share loss, and Mohawk Industries gained 10% after announcing cost-saving measures. Juniper Networks dipped 1% after falling short of analyst predictions.

These movements highlight the significant impact of quarterly results on stock performance in the current market climate.

SK Hynix’s $6.8 Billion Chip Plant Investment Bolsters Nvidia Partnership

SK Hynix, a key supplier of high-bandwidth memory to Nvidia, plans to invest $6.8 billion in a new semiconductor plant in South Korea’s Yongin Semiconductor Cluster. This move strengthens SK Hynix’s position in the AI-driven chip market, where its partnership with Nvidia has been crucial.

The new fab, part of a larger four-plant commitment, will enhance SK Hynix’s capacity to meet growing demand for advanced memory chips used in AI applications. Construction is set to begin in March 2025 and complete in May 2027.

This strategic investment, riding on the success of its Nvidia collaboration, comes as SK Hynix reports its highest quarterly profit in six years, underscoring the booming AI chip market.

Small Cap Rally Shows Historic Potential, Says Principal Asset Management CIO

George Maris of Principal Asset Management identifies the current small cap sector strength as a rare and significant rotation. Small caps have outperformed large caps only twice in 30 years: during Covid-19 and the dot-com bubble. Maris believes this trend has staying power due to its historical nature and potential for broadening earnings. He predicts interest rate cuts will benefit small businesses, making the small cap sector an attractive investment opportunity. The Russell 2000’s recent performance supports this optimistic outlook.