US Stocks Set To Open Flat After Hot 7-Day Rally: Traders Sharpen Focus On Powell's Speech, Disney Earnings
Stock futures indicate a subdued opening on Wednesday after several consecutive gains in major averages. Traders are eagerly awaiting Federal Reserve Chair Jerome Powell’s speech for insights into possible rate cuts. Media earnings, including Walt Disney Co. (NYSE:DIS), take center stage in the earnings news today. Bond yields remain stable, reflecting the dovish messages from Fed officials.
Cues From Tuesday's Trading: U.S. stocks extended their winning streak on Tuesday as traders hoped for an end to the Fed’s rate-hike campaign. The optimism is reflected in the pullback in bond yields, with the 10-year Treasury note ending at its lowest since Oct. 11.
The averages opened on a mixed note but turned uniformly lower in early trading. They then cut their losses and advanced through the morning session before going about a consolidation move in the afternoon.
The S&P 500 and the Nasdaq Composite had their longest winning streak since November 2021, with the former up in each of the past seven sessions. The tech-heavy Nasdaq Composite is on an eight-session winning run. The three indices are now at their highest level since Sept. 20.
Small caps continued to come under pressure and closed lower for the day.
Among S&P sectors, IT and consumer discretionary stocks gained ground, while communication services stocks also saw moderate buying interest. On the other hand, energy, material, utility, and real estate stocks declined sharply.
US Index Performance On Tuesday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.90% | 13,639.86 |
| S&P 500 Index | +0.28% | 4,378.38 |
| Dow Industrials | +0.17% | 34,152.60 |
| Russell 2000 | -0.28% | 1,733.15 |
Analyst Color: Brad McMillan, Chief Investment Officer for Commonwealth Financial Network, said he sees several tailwinds ahead that could prove positive for the market. “Growth is slower but still healthy; Rates are down, but so is inflation; Earnings are up, and valuations have stabilized,” he said.
The economy is walking that tightrope pretty well, which may continue for the rest of the year, the analyst said. “Looking back, we have seen a tough couple of months, but it's possible that the coming months could be better,” he added.
Futures Today
Futures Performance On Wednesday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.01% |
| S&P 500 | +0.07% |
| Dow | +0.08% |
| R2K | -0.07% |
In premarket trading on Wednesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) ticked up 0.04% to $437.12 and the Invesco QQQ ETF (NASDAQ:QQQ) edged down 0.01% to $372.68, according to Benzinga Pro data.
Upcoming Economic Data:
“We must remain vigilant to potential shocks that could exacerbate vulnerabilities in the global financial system,” Fed Governor Lisa Cook said in her prepared remarks presented to the Central Bank of Ireland. She highlighted several risks, including asset valuation pressures, financial sector leverage, funding risks, Chinese economic slowdown, and the geopolitical risks surrounding the tensions in the Middle East and the Russia-Ukraine war.
The Mortgage Bankers Association is due to release its weekly mortgage applications volume at 7 a.m. ET. Mortgage applications volume fell a seasonally adjusted 2.1% in the week ended Oct. 27 compared to the previous week as mortgage rates remain elevated.
Powell is scheduled to make a public appearance at 9:15 a.m. ET.
The Commerce Department will release its wholesale inventories report for September at 10 a.m. ET. Economists, on average, expect, wholesale inventories to remain unchanged compared to the previous month following a 0.1% dip in August.
The Treasury will auction 10-year notes at 1 p.m. ET.
New York Fed President John Williams is due to speak at 1:40 a.m. ET.
Fed Vice Chair for Supervision Michael Barr is due to speak at 2 p.m. ET followed by Fed Governor Philip Jefferson at 4:45 p.m. ET.
See also: Best Futures Trading Software
Stocks In Focus:
- Rivian Automotive, Inc. (NASDAQ:RIVN) rose over 6.50% in premarket trading following its better-than-expected quarter, while Lucid Group, Inc. (NASDAQ:LCID) fell about 5%.
- Other stocks moving on earnings news are Akamai Technologies, Inc. (NASDAQ:AKAM) (up 4.55%), eBay Inc. (NASDAQ:EBAY) (down over 7%), GoPro, Inc. (NASDAQ:GPRO), H&R Block, Inc. (NYSE:HRB), IAC Inc. (NASDAQ:AC) (up about 2.50%) and Upstart Holdings, Inc. (NASDAQ:UPST) (down nearly 23%).
- WK Kellogg Co (NYSE:KLG), Biogen, Inc. (NASDAQ:BIIB), Teva Pharmaceuticals Industries Ltd. (NYSE:TEVA), Fisker, Inc. (NYSE:FSR), EVgo, Inc. (NASDAQ:EVGO), Lumentum Holdings Inc. (NASDAQ:LITE), The New York Times Company (NASDAQ:NYT), Ralph Lauren Corporation (NYSE:RL), Roblox Corporation (NYSE:RBLX), Warner Bros. Discovery, Inc. (NASDAQ:WBD), Under Armour, Inc. (NYSE:UAA) and SeaWorld Entertainment, Inc. (NYSE:SEAS) are among the companies releasing their quarterly reports before the market open.
- Those reporting after the close include Affirm Holdings, Inc. (NASDAQ:AFRM), HubSpot, Inc. (NYSE:HUBS), Instacart (NASDAQ:CART), Beyond Meat, Inc. (NASDAQ:BYND), AMC Entertainment Holdings, Inc. (NYSE:AMC), Luminar Technologies, Inc. (NASDAQ:LAZR), Viasat, Inc. (NASDAQ:VSAT), MGM Resorts International (NYSE:MGM), Disney, Virgin Galactic Holdings, Inc. (NYSE:SPCE), Lyft, Inc. (NASDAQ:LYFT) and Take-Two Interactive Software, Inc. (NASDAQ:TTWO).
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures fell 0.69% to $76.83 in early European session on Wednesday following Tuesday’s 4.27% plunge.
The benchmark 10-year Treasury note edged up 0.004 percentage points to 4.575% on Wednesday,
The global equity markets showed tentativeness as traders paused after the recent gains. Asian stocks were mostly lower, with uncertainty surrounding the Chinese economy giving a reason to sell stocks, while the European markets traded on a nervous note by late-morning trading.
The cryptocurrency market showed green shoots of recovery, led by Bitcoin (CRYPTO: BTC). The apex crypto has added nearly 2% over the past 24 hours.
This illustration was generated using artificial intelligence via MidJourney
