U.S. Stocks May See Further Upside In Early Trading
29 Abril 2024 - 10:05AM
IH Market News
The major U.S. index futures are currently pointing to a
modestly higher open on Monday, with stocks likely to see further
upside following the rally to close out the previous week.
Stocks may continue to benefit from the upward momentum seen
last week, which came amid a positive reaction to upbeat tech
earnings.
Trading activity may be somewhat subdued, however, as traders
look ahead to the Federal Reserve’s monetary policy announcement on
Wednesday.
The Fed is widely expected to leave interest rates unchanged,
but the accompanying statement and Fed Chair Jerome Powell’s
post-meeting press conference may shed additional light on the
outlook for rates.
Recent economic data has tamped down expectations of a near-term
rate cut, with the central bank now seen as likely to leave rates
unchanged until at least September.
Traders may also stick to the sidelines ahead of the release of
an avalanche of earnings news this week along with the Labor
Department’s closely watched monthly jobs report.
Stocks moved sharply higher during trading on Friday, largely
offsetting the weakness seen during Thursday’s session. The major
averages all moved to the upside on the day, with the tech-heavy
Nasdaq leading the charge.
The major averages pulled back off their best levels late in the
day but remained firmly positive. The Nasdaq surged 316.14 points
or 2.0 percent to 15,927.90, the S&P 500 jumped 51.54 points or
1.0 percent to 5,099.96 and the Dow climbed 153.86 points or 0.4
percent to 38,239.66.
For the week, the Nasdaq spiked by 4.2 percent, the S&P 500
shot up by 2.7 percent and the Dow advanced by 0.7 percent.
The rally on Wall Street came amid a positive reaction to some
of the latest earnings news from big-name tech companies.
Shares of Alphabet (NASDAQ:GOOGL) soared by 10.2 percent after
the Google parent reported better than expected first quarter
results and authorized its first-ever dividend as well as a $70
billion stock buyback.
Software giant Microsoft (NASDAQ:MSFT) also jumped by 1.8
percent after reporting fiscal third quarter results that exceeded
expectations.
Shares of Snap (NYSE:SNAP) skyrocketed by 27.6 percent after the
SnapChat parent reported first quarter results that exceeded
expectations on both the top and bottom lines.
On the other hand, shares of Intel (NASDAQ:INTC) plunged by 9.2
percent after the semiconductor giant reported first quarter
earnings that beat estimates but provided disappointing
guidance.
Traders also seemingly reacted positively to closely watched
readings on inflation released by the Commerce Department showing
consumer prices in the U.S. increased in line with economist
estimates in the month of March.
The Commerce Department said its consumer price index rose by
0.3 percent in March, matching the increase seen in February as
well as economist estimates.
Excluding food and energy prices, core consumer prices also
climbed by 0.3 percent for the second straight month, in line with
expectations.
Meanwhile, the report said the annual rate of consumer price
growth accelerated to 2.7 percent in March from 2.5 percent in
February. Economists had expected the pace of growth to tick up to
2.6 percent.
The annual rate of growth by core consumer prices in March came
in unchanged from February at 2.8 percent, while economists had
expected the pace of growth to slow to 2.6 percent.
The readings on inflation, which are said to be preferred by the
Federal Reserve, were included in the Commerce Department’s report
on personal income and spending in the month of March.
“Given the elevated levels of inflation – and this is the new
normal for 2024 – the market is going to need to get over hopes for
Fed rate cuts,” said Chris Zaccarelli, Chief Investment Officer for
Independent Advisor Alliance.
“We’re still optimistic on the market, however, as we believe
that rate cuts aren’t necessary for the bull market to continue,”
he added. “Instead, continued economic expansion and growth in
corporate profits – which are already seeing from the largest
companies in the market – are what will propel stock prices to new
highs.”
Treasury yields moved lower following the release of the report,
which may have helped mitigate any negative response to the
data.
Semiconductor stocks saw substantial strength on the day despite
the slump by Intel, with the Philadelphia Semiconductor Index
surging by 2.6 percent.
Significant strength was also visible among software stocks
following Microsoft’s upbeat results, resulting in a 1.5 percent
gain by the Dow Jones U.S. Software Index.
Networking stocks also saw considerable strength on the day,
driving the NYSE Arca Networking Index up by 1.5 percent.
Retail, computer hardware and brokerage stocks also showed
notable moves to the upside, while utilities stocks bucked the
uptrend.
Intel (NASDAQ:INTC)
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