The Dow Jones futures saw a slight increase overnight, as did the S&P 500 futures and Nasdaq futures. Several major companies, including JPMorgan Chase, Citigroup, Wells Fargo, PNC Financial Services, BlackRock, and UnitedHealth, are set to report their earnings on Friday morning. The stock market rally experienced a slight setback after the release of a CPI inflation report that showed higher-than-expected rates in some areas, as well as a poorly received 30-year Treasury auction. The major indexes, however, did recover somewhat from their lows later in the afternoon. Investors are advised to closely monitor the Nasdaq and S&P 500, which are currently at key levels and could experience an expansion or reduction in exposure.
In terms of specific stocks, Apple and Microsoft saw marginal gains while Google parent Alphabet and Meta Platforms fell slightly from their 52-week highs. Nvidia also experienced a slight increase after earlier declines, while Amazon.com hit key resistance and Tesla saw a modest fall. As for earnings reports, concerns over interest rates, investment banking, and deposits surrounded JPMorgan, Citigroup, Wells Fargo, and PNC Financial. Superregional banks such as PNC and smaller financial institutions may face issues with outflows of bank deposits. Asset manager BlackRock is facing pressure during a difficult period for many in the industry. UnitedHealth, the first health insurer to report results, is expected to see steady growth.
Looking ahead, the stock market rally began slightly higher but ultimately reversed as Treasury yields continued to surge. However, losses were partially pared by the end of the day. The Dow Jones Industrial Average fell 0.5%, while the S&P 500 and Nasdaq composite both declined by 0.6%. The indexes are currently struggling at key levels, with the Nasdaq falling below its 50-day line and the Dow Jones hitting resistance at the 200-day line. The underlying market activity was even worse, with losers heavily outweighing winners on both the Nasdaq and NYSE. The small-cap Russell 2000 and Invesco S&P 500 Equal Weight ETF fell by 2.23% and 1.25% respectively, nearing their lows for 2023. The stock market rally has benefited from the retreat in Treasury yields and the dollar, so the recent sharp gains in these areas are concerning and could present challenges for the current uptrend.
