The major index futures were up on Friday, likely reacting to the outcome of the first presidential debate between the two potential 2024 candidates. Experts believe that a victory for former President Donald Trump would be positive for the market, given his pro-deregulation and low-tax stance. However, the market is currently dealing with another earnings disappointment from a consumer stock. Additionally, a key inflation measure, considered the Federal Reserve’s preferred gauge, is due out before the market opens, with expectations that it will drop to its lowest level since March 2021.
The S&P 500 and Nasdaq Composite are set to end the month and quarter on a positive note, fueled by earnings momentum and slowing inflation. In premarket trading, the Nasdaq 100 was up by 0.42%, the S&P 500 by 0.37%, the Dow by 0.10%, and the R2K by 0.66%. The SPDR S&P 500 ETF Trust and Invesco QQQ ETF saw slight declines in premarket trading.
On Thursday, stocks traded lacklusterly as traders analyzed the revised first-quarter GDP report, which showed slightly better growth than initially estimated, and a slight upward revision to inflation metrics. Jobless claims fell, while durable goods orders increased. Stocks also reacted to disappointing earnings from consumer-facing companies and soft guidance from Micron Technology, Inc.
The S&P 500 Index and Nasdaq Composite closed higher for a third consecutive session but fell just short of their record highs. Small-cap stocks outperformed the major averages, with the Russell 2,000 Index notably higher.
Among sector indices, consumer discretionary, communication services, and real estate stocks made notable gains, while IT stocks and other sectors moved downwards.
Analysts believe that the market may be digesting the strong gains seen in June, with the VIX flat and the market lacking conviction in either direction. LPL Chief Technical Strategist Adam Turnquist warned of a potential pause or pullback in the second half of the year, despite the impressive momentum seen in the equity market.
Looking ahead, upcoming economic data includes reports on personal income and spending, the ISM-Chicago regional manufacturing survey, and the University of Michigan’s revised consumer sentiment index for June. Fed speeches are also scheduled for the day.
In premarket trading, NIKE, Inc. fell over 14.50%, while Trump Media & Technology Group Corp. climbed over 9.50% following the first presidential debate.
In the commodities, bonds, and global equity markets, crude oil and gold futures advanced, while the benchmark 10-year U.S. Treasury note rose. Bitcoin also saw a modest increase. Asian stocks closed mostly higher, with European stocks showing mixed results.
Overall, the market is reacting to various economic indicators and events, with analysts keeping a close watch on the potential impact on stock performance.