In overnight trading, Dow Jones futures, along with S&P 500 futures and Nasdaq futures, experienced slight declines. However, Dow giant Nike saw a rally in earnings. The stock market rally attempt showed modest gains after a slim, mixed advance the day before. Treasury yields reversed from recent long-term highs, while crude oil retreated. Despite the rally attempt, investors are cautious due to the looming government shutdown and the upcoming PCE inflation report on Friday. It is a critical time for investors to build their watchlists.
Nine tech stocks worth watching include Meta Platforms (META), Nvidia (NVDA), Arista Networks (ANET), Uber Technologies (UBER), CrowdStrike (CRWD), Duolingo (DUOL), Aehr Test Systems (AEHR), Synopsys (SNPS), and Vertiv (VRT). Some of these stocks, such as Meta, Vertiv, Uber, Arista Networks, CrowdStrike, and Synopsys, potentially showed signs of aggressive entries on Thursday. Nvidia, Meta, and Uber are on IBD Leaderboard, SNPS is on IBD Long-Term Leaders, ANET, Duolingo, CrowdStrike, and Synopsys are on the IBD 50, and Nvidia and CRWD are on the IBD Big Cap 20.
Dow Jones futures were down 0.1% compared to fair value, despite Nike contributing to a lift. S&P 500 futures sank 0.2%, and Nasdaq 100 futures fell 0.15%. The 10-year Treasury yield slightly decreased to 4.59%. The PCE inflation report, to be released on Friday, will likely impact Dow futures and Treasury yields. Nike stock experienced a surge in after-hours trading due to better-than-expected earnings, although sales growth fell slightly short of expectations.
The Commerce Department will release the August PCE price index on Friday, with economists predicting a rise of 0.5% compared to July. The annual PCE inflation rate is expected to increase to 3.5%, while core inflation is projected to cool to 3.9% from July’s 4.2%. This data follows the Fed’s hawkish rate-hike outlook in September, which assumed hot inflation in the final months of 2023. However, if core PCE inflation falls below the Fed’s expectations, policymakers may choose to forgo another rate hike this year.
Thursday’s stock market rally attempt showed gains across the Dow Jones Industrial Average, the S&P 500 index, and the Nasdaq composite. Winners outnumbered losers, with the small-cap Russell 2000 buoyed by financials. Energy stocks maintained Wednesday’s gains, while tech stocks, insurers, and building-related groups saw increases. Crude oil prices fell, and the 10-year Treasury yield dropped after briefly reaching a fresh long-term high. This was the second day of the stock market rally attempt for the S&P 500 and Nasdaq and the first day for the Dow Jones. A follow-through day next week would indicate a sustained uptrend.