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Wall Street On Track To Rebound As Traders Train Eyes On Key Data Ahead Of Long Weekend: Analyst Says Brace For More Gains In Second-Half

Published 24/05/2024, 12:15
© Reuters.  Wall Street On Track To Rebound As Traders Train Eyes On Key Data Ahead Of Long Weekend: Analyst Says Brace For More Gains In Second-Half

Benzinga - by Shanthi Rexaline, Benzinga Editor.

Wall Street is eyeing a return to winning ways on Friday after the lackluster sentiment seen in the past two sessions. The index futures held modestly higher in early trading. The spotlight is likely to be on a Fed speech scheduled for the day and the inflation expectations readings of the University of Michigan’s consumer sentiment report. Traders may also look ahead to the durables goods orders report to gauge the strength of the economy, especially in light of the recent weak economic data.

Futures Performance (+/-)
Nasdaq 100 +0.29%
S&P 500 +0.29%
Dow +0.15%
R2K +0.32%

In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) climbed 0.28% to $527.45 and the Invesco QQQ ETF (NASDAQ:QQQ) traded up 0.30% at $455.0, according to Benzinga Pro data.

Cues From Previous Session

U.S. stocks clocked back-to-back losses on Thursday notwithstanding the nearly 10% rally seen in market heavyweight Nvidia Corp. (NASDAQ:NVDA). Data showing weekly jobless claims falling more than expected in the recent reporting week and better-than-expected S&P Global final private sector purchasing managers indices weighed down on sentiment. The strong data trimmed the odds of multiple Fed rate cuts this year, dampening the market mood.

The major indices opened higher and then took divergent routes. The Dow Industrials of which Nvidia is not a component fell steadily in the morning and sharply in the afternoon, with all 30 index components closing in the red. The Nasdaq Composite and the S&P 500 Index hovered above the unchanged line until the mid-session, thanks to the Nvidia prop, but succumbed to rate worries thereafter.

Ten of the 11 S&P 500 sector classes retreated, with IT stocks alone bucking the downtrend.

Reacting to the pullback, Jamie Cox, Managing Partner for Harris Financial Group, said, “Markets tend to take breather heading into a long holiday weekend. The Fed minutes provided the catalyst and not even Nvidia could refocus markets on the positives.”

Index Performance (+/-) Value
Nasdaq Composite -0.39% 16,736.03
S&P 500 Index -0.74% 5,267.84
Dow Industrials -1.53% 39,065.26
Russell 2000 -1.60% 2,048.41

Insights From Analysts:

Fund manager Louis Navellier sees volatility ahead. “Overall, the earnings season is largely over. The market will start to oscillate going forward. Any stocks that post good earnings are good buys on dips,” he said.

Meanwhile, Carson Group’s Ryan Detrick pointed to another bullish historical trend. The market strategist noted that Wednesday marked the 100th trading session and the S&P 500 was still holding its double-digit year-to-date gain. Gains of similar magnitudes were seen in 2021, 2019, 2013, 1998, 1997, 1996, and 1995, he noted.

All these years saw the gains continuing into the second half, he added.

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