Dow Jones futures were little changed early Friday, while S&P 500 futures and Nasdaq futures rose after President Joe Biden faltered in Thursday night’s debate with former President Donald Trump. The Fed’s favorite inflation gauge is on tap early Friday.
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Nasdaq Makes It Three Straight, Eyes 18,000; Meta, Monday.com, ServiceNow In Focus
The stock market rally showed slim gains on the major indexes Thursday while small caps led. Software stocks stood out with powerful moves, continuing their monthlong rebound.
Monday.com (MNDY), Zeta (ZETA), CyberArk Software (CYBR), Datadog (DDOG), ServiceNow (NOW), AppLovin (APP) and AppFolio (APPF) flashed buy signals.
Meanwhile, Meta Platforms (META) broke out Thursday. Amazon.com (AMZN) and Tesla (TSLA) extended Wednesday’s breakouts.
Nike (NKE) topped earnings views Thursday night. But sales fell short and Nike cut revenue growth forecasts. Nike stock plunged 15% early Friday. The Dow component has been struggling since late 2021.
Presidential Debate: Trump Vs. Biden Rematch
Heading into the first presidential debate of 2024, polls suggested former President Trump was the modest favorite to return to office, ousting the current incumbent, President Biden.
Biden’s Thursday night debate performance was widely panned, with stumbling and mumbling in his answers. Even a number of sympathetic commentators argued that the president should exit the race. Trump was largely seen as making no mistakes.
Biden’s odds of winning the Democratic nomination tumbled overnight in prediction markets.
Fed Inflation Gauge
The Commerce Department releases the May PCE price index at 8:30 a.m. ET as part of its income and spending report. The overall PCE price index is seen rising 0.1% vs. April, with the PCE inflation rate cooling slightly to 2.6% vs. a year earlier.
The core PCE price index, the Fed’s favorite inflation gauge, is also seen rising 0.1% vs. April. The core PCE inflation rate should slow to 2.6% from April’s 2.8%.
Dow Jones Futures Today
Dow Jones futures were roughly flat vs. fair value, with Nike stock a drag. S&P 500 futures rose 0.3%. Nasdaq 100 futures climbed 0.35%.
The 10-year Treasury yield edged up to 4.31%.
Crude oil futures rose slightly, above $82 a barrel.
Dow futures erased slim losses Thursday night during the Trump-Biden debate. The core PCE inflation data is likely to swing futures and Treasury yields before the open.
Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
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Stock Market Rally
The stock market rally shrugged off a post-earnings tumble in Micron Technology (MU) and a modest decline in Nvidia (NVDA).
The Dow Jones Industrial Average and S&P 500 rose 0.1% in Thursday’s stock market trading. The Nasdaq composite advanced 0.3%.
Market breadth was modestly positive.
The small-cap Russell 2000 jumped 1%, closing just above its 50-day line for the first time since June 13.
A few days ago, the market appeared to be rotating out of Nvidia and AI plays and into financials and industrials. The former seem to be trying to find their footing while financials and industrials have backed off, slightly. Now software and megacaps are taking the lead.
U.S. crude oil prices rose 1% to $81.74 a barrel.
The 10-year Treasury yield declined three basis points to 4.29%.
ETFs
Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) popped 2.1% with ServiceNow, CrowdStrike and many others in IGV. The VanEck Vectors Semiconductor ETF (SMH) fell 0.8%.
Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) advanced 1% and ARK Genomics ETF (ARKG) dipped 0.2%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) retreated 0.6%. SPDR S&P Homebuilders ETF (XHB) and the Energy Select SPDR ETF (XLE) edged up 0.2%. The Health Care Select Sector SPDR Fund (XLV) lost 0.2%.
The Industrial Select Sector SPDR Fund (XLI) inched up 0.1%. The Financial Select SPDR ETF (XLF) dipped 0.1%.
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Megacap Stocks In Buy Range
Meta stock rose 1.3% to 519.56, clearing a 514.01 cup-with-handle buy point. Shares have been actionable since earlier in the week from breaking the downtrend of the handle.
Amazon stock climbed 2.2% to 197.85, moving up in the buy zone after Wednesday’s 3.9% pop cleared the 191.70 flat-base buy point.
Tesla stock edged up 0.5% to 197.42. The EV giant leapt 4.8% on Wednesday, breaking out from a 191.08 handle buy point. TSLA stock is still below its 200-day line.
Software Stocks
Software struggled from early February before finally bottoming at the end of May after a…
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