The market mood appears to have improved after Thursday’s inflation-induced sell-off, with stock futures rising modestly early Friday. Earnings news has been largely negative, potentially acting as a pushback. Bond yields are slipping as traders continue to harbor hopes that the Federal Reserve, led by Jerome Powell, would lean toward a dovish stance and signal rate cuts at the upcoming meetings.
Traders may also sift through a few key economic reports due for the day with an eye on the upcoming week’s Fed meeting.
Cues From Previous Session:
The much hotter-than-expected February producer price inflation report spooked traders on Thursday, with small-caps bearing the brunt of the selling. The weakness in the small-cap space could be explained by the fact that they are very sensitive to interest rates, given that the bulk of their financing would be in the form of bank loans.
The major averages opened higher but returned their gains immediately after and spent the rest of the session below the unchanged line. On a positive note, the key indices snapped back some of their losses in late trading before closing off the session’s lows.
The tech-Nasdaq Composite and the broader S&P 500 Index ended lower for a second straight session, pulling further away from their all-time highs.
Nine of the 11 S&P 500 sectors closed lower, with only energy and communication services stocks bucking the downtrend. Real-estate, financial, and utility stocks were among the worst decliners.
Index
Performance (+/-)
Value
Nasdaq Composite
-0.30%
16,128.53
S&P 500 Index
-0.29%
5,150.48
Dow Industrials
-0.35%
38,905.66
Russell 2000
-1.96%
2,031.18
Analyst Color:
Following Thursday’s “disastrous” PPI report, fund manager Louis Navellier said the Fed will unlikely cut interest rates until June or later. According to the fund manager, retail sales were underwhelming, pointing to lackluster GDP growth.
Despite the muted outlook, Navelier said the new market leadership remains intact. “AI hardware and weight loss drugs remain the strongest investment themes,” he said.
Futures Today
Futures Performance OnFriday ( as of 6: 45 a.m. EDT)
Futures
Performance (+/-)
Nasdaq 100
+0.29%
S&P 500
+0.25%
Dow
+0.13%
R2K
+0.25%
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.21% to $514.44, and the Invesco QQQ ETF (NASDAQ:QQQ) climbed 0.25% to $440.23, according to Benzinga Pro data.
Upcoming Economic Data:
The New York Fed is due to release the results of its Empire State manufacturing survey for March at 8:30 a.m. EDT. On average, economists expect the business conditions index to come in at -7, suggesting contracting activity. However, the index is likely to improve from the February reading of -2.4.
The Bureau of Labor Statistics will release its February import and export prices report at 8:30 a.m. EDT. Import and export prices may have increased 0.3% and 0.2% month-over-month, respectively, slower than the 0.8% increases each in the previous month.
The Fed is scheduled to release its industrial production report for February at 9:15 a.m. ET. The consensus estimate calls for industrial output to remain unchanged from the previous month despite a 0.3% increase in manufacturing production. These metrics fell 0.1% and 0.5%, respectively, in January.
The University of Michigan’s preliminary consumer sentiment index is due at 10 a.m. ET and is expected to come in at 77.1 for March, up slightly from 76.9 in February. Traders may also focus on the survey’s inflation expectations readings.
Adobe Inc. (NASDAQ:ADBE) fell over 11.5% in premarket trading following the company’s earnings announcement.
Other stocks reacting to earnings released after the market close Thursday are Blink Charging Co. (NASDAQ:BLNK) (down about 8.50%), Smartsheet Inc. (NYSE:SMAR) (down about 12%), PagerDuty, Inc. (NYSE:PD) (down over 7.50%), Cardlytics, Inc. (NASDAQ:CDLX) (up over 38.50%), Ulta Beauty, Inc. (NASDAQ:ULTA) (down about 6.50%) and Zumiez Inc. (NASDAQ:ZUMZ) (down over 6%).
Coinbase Global, Inc. (NASDAQ:COIN) fell over 5% following the crypto sell-off.
Rivian Automotive, Inc. (NASDAQ:RIVN) climbed about 4% after Piper Sandler upgraded the stock to Overweight.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures fell 0.63% to $80.75 in premarket trading, reversing some of the 1.93% gain they made on Thursday. Gold futures edged up, although they still trade off the record highs.
The yield on the 10-year Treasury bond, which spiked on Thursday in the aftermath of the inflation data, edged down 0.019 points to 4.279%. Bitcoin (CRYPTO: BTC) fell nearly 8% and traded below the $67,500 level.
Most Asian markets retreated on Friday, tackling Wall Street’s overnight negative lead, although the Chinese market advanced moderately after weak house prices and money stock and loan growth data released from the country raised hopes of more government stimulus.
European stocks rose modestly in late-morning deals, with the Euro STOXX 50 Index up about 0.40%.
