Key Points:
- US stock futures dipped as investors await a key inflation report; Dow, S&P 500, and Nasdaq futures fell 0.10%, 0.20%, and 0.31%, respectively.
- April PCE data is expected to have a 2.7% core PCE rise, which is key for gauging inflation and Federal Reserve policy impacts.
Investors are keenly reviewing corporate earnings reports as they anticipate a critical inflation report. The US stock futures dipped, indicating a potential downturn in the market. The Dow Jones Industrial Average futures fell by 37 points, or 0.10%, while the S&P 500 and Nasdaq 100 futures dipped by 0.20% and 0.31%, respectively. This intro to the trading day set a cautious tone among investors.
Dell Drops 16%, Zscaler Jumps 14%, Gap Rises 21%
Dell Technologies experienced a dramatic tumble of 16% despite surpassing first-quarter expectations. In contrast, Zscaler surged by 14%, and Gap saw a notable 21% increase. Conversely, MongoDB plunged 23%, and Nordstrom slid 6%. These mixed earnings reports underscore the volatile nature of the market as it reacts to company-specific news.
Stock Futures: Dow Down 0.9%, S&P Drops 0.6%
In the previous session, the Dow Jones Industrial Average closed over 300 points lower, a decline of 0.9%, largely due to Salesforce missing revenue expectations. The S&P 500 dropped by 0.6%, and the Nasdaq Composite fell by 1.1%. This negative sentiment from the previous trading day casts a shadow over the market.
Nasdaq Up 7% in May, Best Month Since Nov 2023
Several factors are contributing to the current market sentiment. The holiday-shortened trading week sees the S&P 500 and Nasdaq Composite potentially ending their five-week winning streaks, with the Dow poised for a second consecutive week of losses.
Rising Treasury yields also weighed on investor sentiment, reflecting concerns over the sustainability of the recent stock rally. Additionally, the advance of large-cap tech stocks, such as Nvidia, is masking broader market weaknesses. Year-to-date, the S&P 500 has gained 10%, while the equal-weighted index has only risen by 3%, highlighting the uneven market performance.
Inflation Insight: April Core PCE Predicted at 2.7%
Attention is now turning to the upcoming April personal consumption expenditure (PCE) data, due Friday morning. Analysts expect a 2.7% year-over-year increase for core PCE, down slightly from the previous 2.8% gain. This data is crucial as it will provide further insights into inflation trends and potential impacts on Federal Reserve policies.
Major Stock Futures Show Positive Monthly Performance in May
Despite recent volatility, the overall monthly performance of major indices remains positive. The Dow Jones Industrial Average is up by 0.8%, the S&P 500 has risen by 4%, and the Nasdaq Composite is on track for a 7% gain, marking its best month since November 2023, when it gained 10.70%. These figures suggest that the longer-term outlook may remain favourable while short-term challenges persist.
