Benzinga - by Shanthi Rexaline, Benzinga Editor.
The negative sentiment prevailing in the week continues, with stock futures indicating another down session on Friday. The absence of significant Main Street drivers may exacerbate the weakness, though positive earnings movements could offer some support. China remains a focal point due to domestic growth concerns and the potential for a trade war with the U.S., dampening traders’ risk appetite.
Analysts remain optimistic about the long term. “Despite a weak August and the possibility of a challenging September, overall conditions remain favorable. While volatility may arise, the longer-term trend is likely to remain positive,” said Brad McMillan, Chief Investment Officer at Commonwealth Financial Network.
Cues From Thursday’s Trading
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.89% | 13,748.83 |
| S&P 500 Index | -0.32% | 4,451.14 |
| Dow Industrials | 0.0017 | 34,500.73 |
| Russell 2000 | -0.99% | 1,855.76 |
Thursday’s trading witnessed a pullback, particularly in tech stocks, though the Dow Industrials held steady, boosted by gains in defensive healthcare and consumer staple stocks.
Rumors of China expanding its iPhone ban led to a sell-off in Apple, Inc. (NASDAQ:AAPL) and other tech firms, fueling concerns about a potential U.S.-China trade war.
In economic news, unexpected declines in jobless claims for the week ended Sept. 2 were noted, and revised second-quarter productivity and cost data showed upward revisions in unit labor costs, a measure of inflation.
For the third consecutive session, the Nasdaq Composite, S&P 500, and Russell 2,000 indices declined, mainly due to concerns about rising interest rates.
Futures On Friday
| Futures | % Change |
| Nasdaq 100 | -0.12% |
| S&P | -0.11% |
| Dow | -0.14% |
| R2K | -0.05% |
Analyst Color:
Even with the recent weakness, the major averages are sporting healthy gains for the year-to-date period. “With the S&P still up over 16% YTD and the NASDAQ +32%, some downward volatility is inevitable, especially in a traditionally seasonally weak month,” said fund manager Louis Navellier.
“It is likely that in the 4th quarter, we’ll look back on any major pullbacks we’ll be seeing in the weeks ahead as buying opportunities if the soft landing forecasts hold,” he added.
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) slipped 0.14% to $444.23 and the Invesco QQQ ETF (NASDAQ:QQQ) declined 0.13% to $371.59, according to Benzinga Pro data.
Upcoming Economic Data:
Vice Chair for Supervision of the Board of Governors of the Federal Reserve Michael Barr is scheduled to speak at 9 a.m. EDT.
The Commerce Department is due to release its wholesale inventories report for July at 10 a.m. EDT. Wholesale inventories are estimated to have dipped a more modest 0.1% month-over-month compared to the 0.5% slide in June. The rate of decline in wholesale sales may have decelerated from 0.7% to 0.2%.
See also: Best Futures Trading Software
Stocks In Focus:
DocuSign, Inc. (NASDAQ:DOCU) rose over 3% in premarket trading following the release of its quarterly results.
Among the other stocks moving in reaction to earnings include RH (NYSE:RH) (down 7.75%), Semtech Corp. (NASDAQ:SMTC) (up over 2%), Smartsheet, Inc. (NYSE:SMAR) (up over 9%), Smith & Wesson Brands, Inc. (NASDAQ:SWBI) (up over 11%) and Zumiez, Inc. (NASDAQ:ZUMZ) (down about 9%).
Food and drug retailer Kroger Co. (NYSE:KR) is scheduled to release its quarterly results before the market opens.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 0.59% to $87.38 in early European session on Friday following a 0.77% retreat on Thursday.
The benchmark 10-year Treasury note fell 0.016 percentage points to 4.246% on Thursday.
Major Asian markets fell across the board, with the exception of the Indian market. Japan’s Nikkei 225 average led the region’s losses following the release of weak second-quarter GDP data. The Hong Kong market remained closed for trading.
Stocks in the region reacted to the intensifying uncertainty concerning the global growth and rate outlook and the rising risk of geopolitical tensions.
European stocks fell in late-morning trading, with the STOXX 600 Index, a pan-European measure of stock market performance, down for eight straight sessions.
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This illustration was generated using artificial intelligence via MidJourney.
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