U.S. stocks are set for a cautious start on Friday as worries about rising interest rates resurface. Traders are looking for a catalyst to push the market higher after its recent record-breaking performance. The meme stock rally could provide some support to small and mid-cap stocks. Traders will be monitoring the Conference Board’s leading economic index data and bond yields for clues on the market’s future direction.
Despite a potential downturn, major indices are still expected to end the week with gains. Federal Reserve speeches scheduled for next week could offer more insight into the central bank’s interest rate plans.
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (SPY) dipped 0.01% to $528.64, while the Invesco QQQ ETF (QQQ) rose 0.05% to $452.21, according to Benzinga Pro data.
Stocks paused on Thursday after reaching new intraday highs. The market saw some profit-taking as traders digested reports showing an increase in jobless claims, weak industrial production data, and a spike in import prices.
The Dow Jones Industrial Average crossed the 40,000 mark for the first time, with consumer staple stocks being the only sector to end higher thanks to Walmart, Inc.’s post-earnings rally.
Comerica Wealth Management’s Chief Investment Officer, John Lynch, praised Dow’s record climb, attributing it to capital formation, innovation, profit growth, and economic resilience.
Comerica’s Lynch and Independent Advisor Alliance’s Chief Investment Officer, Chris Zaccarelli, both advised caution despite the bullish market sentiment. They highlighted potential headwinds such as geopolitics, valuation, and market interest rates.
Louis Navellier, a fund manager, suggested that investors view any pullback as a buying opportunity, emphasizing the fear of missing out among investors.
The Conference Board will release its leading economic index for April, while Fed Governor Christopher Waller is scheduled to speak.
Stocks in focus include Take-Two Interactive Software, Inc. (TTWO), Doximity, Inc. (DOCS), and DXC Technology Company (DXC), among others.
Commodities, bonds, and global equity markets are showing mixed movements, with crude oil futures and gold futures on the rise. The 10-year U.S. Treasury note yield is up, while Bitcoin (BTC/USD) has rebounded above $66k.
Asian stocks closed mixed, influenced by Wall Street’s performance and weak economic data from China. Chinese and Hong Kong stocks rallied on hopes of additional stimulus measures. Major European markets were trading in the red.
Overall, the market remains cautiously optimistic, with traders keeping a close eye on economic data and market developments.