On Thursday morning, S&P 500 and Nasdaq 100 futures saw a notable increase, spurred by strong earnings from major tech firms Microsoft and Meta Platforms. S&P 500 futures rose by 0.9%, while Nasdaq 100 futures surged by 1.31%. Additionally, futures for the Dow Jones Industrial Average gained 131 points, representing a 0.29% rise.
The “Magnificent Seven” tech giants, particularly Microsoft and Meta, experienced significant stock price boosts as Microsoft reported that its cloud service, Azure, surpassed $75 billion in annual revenue. Meta also provided a positive third-quarter sales outlook, exceeding analysts’ expectations.
Adding to the day’s optimism, President Donald Trump announced a new trade agreement with South Korea, lowering the proposed tariffs from 25% to 15%. This announcement comes just before a critical deadline for tariff changes.
However, the market faced challenges the previous day, with the S&P 500 closing slightly lower as Federal Reserve Chair Jerome Powell indicated hesitance to proceed with interest rate cuts. The S&P lost 0.12%, while the Dow Jones fell by 171.71 points, or 0.38%. Interestingly, the Nasdaq Composite managed a mild gain of 0.15%.
Internal divisions within the Federal Reserve were highlighted, with governors Michelle Bowman and Christopher Waller expressing dissent over the decision to maintain interest rates within the range of 4.25% to 4.50%. Powell’s comments suggested no imminent policy shifts.
Investment analyst Ross Mayfield from Baird noted that recent market losses were understandable given the current “stretched” valuations, following a six-day streak of record closes for the S&P 500. Mayfield suggested that the market is due for some consolidation, indicating a potential pause before continuing its upward trajectory.
Looking ahead, traders are keenly awaiting June’s personal consumption expenditures price index, which the Fed considers an essential measure of inflation, alongside weekly jobless claims. Several major companies, including Comcast, Bristol-Myers Squibb, and CVS Health, are set to report earnings before the market opens, with Apple and Amazon’s results expected later in the day.
This array of positive earnings and strategic trade negotiations adds a hopeful tone to the current market landscape, as analysts and traders remain vigilant about upcoming economic indicators.