Nasdaq and S&P 500 futures signaled a higher open on Wednesday, thanks to upbeat guidance from EV giant Tesla, Inc. (NASDAQ:TSLA) and semiconductor major Texas Instruments, Inc. (NASDAQ:TXN), although Dow futures were marginally lower. Investors will keep their eyes peeled for some important economic data, including early quarterly GDP growth and personal consumption expenditure figures, later this week.
The PCI reading will likely be the last inflation reading before the Federal Reserve announces its next verdict in May. Bond yields resumed their climb, reflecting worries the Fed was not cutting rates enough this year.
Futures Performance On Wednesday ( as of 6:10 a.m. EDT)
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.46% |
| S&P 500 | +0.09% |
| Dow | -0.08% |
| R2K | -0.41% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.07% to $505.98, and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.51% to $427.22, according to Benzinga Pro data.
Cues From Past Session:
Traders relished weak private-sector activity data on Tuesday, pushing bond yields lower, as they saw it as a catalyst that could keep the Fed dovish. S&P Global’s manufacturing purchasing managers’ index unexpectedly fell into contraction territory and the service sector PMI came in below expectations, with the composite PMI falling to a two-month low.
The major indices opened higher and rose in early trading before moving roughly sideways for the remainder of the session. The Dow Jones Industrial Average climbed for a fourth straight session and settled at a two-week high, while the Nasdaq Composite and the S&P 500 Index notched up their second straight session of gains.
IT and communication services stocks led the gains on a day when only the material space came under selling pressure.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +1.59% | 15,696.64 |
| S&P 500 Index | +1.20% | 5,070.55 |
| Dow Industrials | +0.69% | 38,503.69 |
| Russell 2000 | +1.79% | 2,002.64 |
Insights From Analysts:
The market may have resumed the rally after the early-April lull, said Carson Group’s Ryan Detrick. “Late April tends to be strong. We had a weak first part. Now are we getting the stronger late part,” he said. The analyst noted that late last week, there were multiple signs of a pending low forming, along with the CBOE volatility index in backwardation, huge inflows, and strong breadth under the surface.
Late April tends to be strong. We had the weak first part ✅ Now are we getting the stronger late part ❓I think so, as noted many times late last week, multiple signs of a pending low were forming (VIX in backwardation, huge outflows, strong breadth under the surface). https://t.co/aeJuXd83vn
— Ryan Detrick, CMT (@RyanDetrick) April 23, 2024
FundStrat’s Tom Lee said in a post at the start of the week that it was surprising to see pessimism surge so quickly following two weeks of market wobble. “This is why equities risk/reward has improved so much to start this week,” he said, adding that “tops” rarely happen when bearishness prevails.
The analyst sees the need for just one catalyst that can bring back the momentum. In an interview with CNBC, he said, “Now we just need a positive catalyst. I think as long as inflation tracks better than expected, I think we're in a good position to rally.”
Upcoming Economic Data:
The Commerce Department is scheduled to release the durables goods orders report for March at 8:30 a.m. EDT. Economists, on average, expect durable goods orders to rise 2.6% month-over-month, faster than the 1.3% increase in February. Excluding the volatile transportation orders, the order growth may have slowed from 0.5% to 0.3%.
The Energy Information Administration will release its petroleum status report at 10:30 a.m. EDT.
The Atlanta Fed is due to release its first-quarter GDP data at 12:30 p.m. EDT.
The Treasury will auction five-year notes at 1 p.m. EDT.
See Also: Best Futures Brokers
Stocks In Focus:
- Tesla rallied over 10% in premarket trading following the release of its quarterly results.
- The other stocks moving on earnings reporting Tuesday after the market close are Texas Instruments (up over 7%), Steel Dynamics, Inc. (NASDAQ:STLD) (up over 3%), Mattel, Inc. (NASDAQ:MAT) (up about 3%), and Baker Hughes Company (NASDAQ:BKR) (down over 3%).
- Thermo Fisher Scientific Inc. (NYSE:TMO), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), Norfolk Southern Corporation (NYSE:NSC), Humana Inc. (NYSE:HUM), Hasbro, Inc. (NASDAQ:HAS), General Dynamics Corporation (NYSE:GD), Boston Scientific Corporation (NYSE:BSX), Biogen, Inc. (NASDAQ:BIIB) and AT&T Corp. (NYSE:T) are among the companies reporting their earnings ahead of the market open.
- Notable names reporting after the close are Whirlpool Corporation (NYSE:WHR), Western Union Company (NYSE:WU), ServiceNow, Inc. (NYSE:NOW), QuantumScape Corporation (NYSE:QS), O’Reilly Automotive, Inc. (NASDAQ:ORLY), Meta Platforms, Meritage Homes Corporation (NYSE:MTH), Lam Research Corp. (NASDAQ:LRCX), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), International Business Machines Corp. (NYSE:IBM), Ford Motor Co. (NYSE:F) and Chipotle Mexican Grill, Inc. (NYSE:CMG).
Commodities, Bonds, and Global Equity Markets:
Crude oil futures, which staged a moderate recovery on Tuesday, have reversed course, with a barrel of WTI-grade crude trading down 0.45% at under $83. Gold futures also saw weakness but held above the $2,300 level.
The 10-year note yield, which eased on Tuesday, inched its way back up to 4.64% ahead of Friday’s inflation data.
Bitcoin (CRYPTO: BTC) continued to hold the $66,000 level, as it moved in a tight range.
Asian stocks rallied across the board, tracking the positive lead from Wall Street overnight and latching on to the optimism over positive tech earnings. The Australian market, however, ended marginally lower. Sentiment in Europe was positive, although the upward move was more muted, given the markets in the region have been higher for a third straight session. The Euro STOXX 50 was up about 0.33% in early trading.
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