Ahead of the opening bell, the stock market futures for the S&P 500 and Dow Jones Industrial Average are slightly in the red following a day of positive price movement. However, NASDAQ futures are benefiting from a continued price recovery for semiconductor giant NVIDIA (NVDA), which experienced some profit taking yesterday. Additionally, shares of global shipping provider FedEx (FDX) are up significantly in pre-market trading thanks to strong quarterly results and a better-than-expected outlook for the coming months. Even so, a significant number of stocks are trading in the red, and thus, we expect a weak start to the trading day. Later this morning, new home sales will be released after the market opens.
On Tuesday, the stock market started the day Tuesday strongly, led by a recovery in a few technology stocks. Elsewhere, housing prices increased 7.2% in April, according to the latest S&P Case-Shiller home price index. Additionally, consumer confidence was slightly stronger than expected. The broad-market indices moved higher in the first portion of the session gave back some of the gains mid-day, but moved higher in the final hours of the trading day. Overall, the S&P 50 rose 21 points (up 0.39%), and the NASDAQ finished up 221 points (up 1.26%). However, the Dow Jones Industrial Average pulled back 299 points (down 0.76%). Moreover, market breadth was quite negative, with decliners outpacing advancers by a 1.8-to-1.0 ratio. Technology stocks were amongst the best performers yesterday, helped by a solid price recovery for NVIDIA (NVDA), which rebounded after several days of profit taking. The communications segment also performed well, thanks to decent price action from Meta Platforms (META). On the other hand, REITs were among the worst performers.
In commodity news, oil prices fell yesterday following the report of larger-than-expected crude oil inventories for the week of June 21st, suggesting that supply is outpacing demand. U.S. Treasury bond yields retreated yesterday as traders moved into the secure asset and drove pricing higher. The Chicago Board Options Exchange Volatility Index, or VIX, commonly known as the fear index, declined yesterday as traders priced in less stock price volatility in the days ahead.
Several economic reports will be released in the coming days, potentially impacting the market. These include initial jobless claims, durable goods orders for May, and pending home sales on Thursday. On Friday, the core- and non-core Personal Consumption Expenditures (PCE) index, as well as personal income and spending for the month of May, will be released. Additionally, several Federal Reserve Governors will give remarks on the broader economy. Meanwhile, some major companies will report results in the days ahead, including athletic apparel maker and Dow-30 Component Nike (NKE) on Thursday, in a prelude to the beginning of the main second-quarter earnings season when major banks report in the early weeks of July. – John E. Seibert
At the time of this article’s writing, the author held positions in one or more any of the companies mentioned.
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