U.S. stock index futures experienced a rise in evening deals on Sunday, signaling Wall Street’s intention to bounce back from two consecutive weeks of significant losses. These losses were primarily driven by a downturn in technology stocks and diminishing hopes for interest rate reductions. Despite these challenges, the sentiment remained tenuous as the financial community braced for the commencement of the first-quarter earnings season, which is expected to feature reports from some of the largest technology companies on Wall Street.
A decline in chip manufacturing stocks, which exerted heavy pressure on Wall Street indexes over the prior weeks, incited a sector-wide sell-off. Nonetheless, this downturn has presented opportunities for bargain buying within the technology sector. The futures for the S&P 500 climbed by 0.3% to 5,107.75 points, Dow Jones Industrial Average futures improved by 0.4% to 17,254.50 points, and Nasdaq 100 futures increased by 0.2% to 38,295.0 points as of 19:19 ET (23:19 GMT).
The forthcoming quarterly earnings reports from major technology firms are now in sharp focus. This week sees the earnings releases from four of the “Magnificent Seven” stocks, which include Tesla Inc, Meta Platforms Inc, Microsoft Corporation, and Alphabet Inc. These reports are eagerly anticipated, given the tech sector’s recent performance woes, attributed in part to underwhelming earnings from semiconductor leaders ASML Holding and TSMC, which have raised concerns about the prospective benefits of artificial intelligence advancements for the sector.
NVIDIA Corporation found itself at the epicenter of the tech rout, with its shares taking a 10% dive on Friday, hitting a nearly two-month low. Overall market benchmarks in the U.S. also retreated, with the S&P 500 and Nasdaq posting weekly declines of 3.5% and 6.1%, respectively. The Dow Jones, however, remained relatively stable. Non-tech sectors, such as financials, discretionaries, and industrials, provided some support to the markets, underscored by a strong performance from American Express following its robust first-quarter earnings.
Investors also have their sights set on incoming economic indicators slated for release over the week, amidst fading expectations for a rate cut by the Federal Reserve in June. Of particular interest are the upcoming PMIs for April and the Personal Consumption Expenditures (PCE) inflation data, the latter being the Fed’s preferred inflation measure. The PCE data, anticipated later in the week, is expected to further illustrate the persistent nature of inflation in March.
These events unfold in a week charged with potential market-moving developments, from critical earnings reports that could impact the trajectory of technology stocks, to economic data that may influence the Federal Reserve’s policy decisions moving forward. Investors remain cautiously optimistic, looking for signs of stabilization and recovery in a market landscape that has been notably tumultuous in recent weeks.