In the realm of U.S. stock trading, the evening hours on Sunday marked a potential turnaround as stock index futures displayed upward momentum. This positive shift came after Wall Street faced two consecutive weeks of significant losses, largely driven by a sharp downturn in technology stocks and diminishing hopes for interest rate cuts.
Investor sentiment, however, remained tenuous, particularly with the imminent onset of the first-quarter earnings season. This period, where companies disclose their financial performance for the previous quarter, was of keen interest to market participants, especially given the reports expected from some of Wall Street’s largest technology firms.
The recent downtrend in the technology sector, sparked by declines in chipmaking stocks, had weighed heavily on Wall Street indices over the preceding two weeks. Yet, within this market turbulence, there emerged opportunities for savvy investors to capitalize on discounted valuations—a phenomenon often referred to as “bargain buying.”
During Sunday’s evening trading session, S&P 500 Futures rose by 0.3% to reach 5,107.75 points, while Nasdaq 100 Futures climbed 0.4% to 17,254.50 points. Dow Jones Futures also showed resilience, advancing 0.2% to 38,295.0 points by 19:19 ET (23:19 GMT).
Attention turned toward the forthcoming earnings announcements from key players in the technology sector. Dubbed the “Magnificent Seven,” these companies were poised to reveal their financial results throughout the week. Notable among them were Tesla Inc (NASDAQ:TSLA), scheduled to report on Tuesday, followed by Meta Platforms Inc (NASDAQ:META), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc (NASDAQ:GOOGL) later in the week.
The tech sector’s recent struggles stemmed in part from disappointing earnings reports from industry giants ASML Holding (NASDAQ:ASML) and TSMC (NYSE:TSM), igniting concerns about the sector’s growth prospects, particularly in the realm of artificial intelligence.
Among the technology stocks, NVIDIA Corporation (NASDAQ:NVDA) bore the brunt of the downturn, experiencing a precipitous 10% decline on Friday, driving it to a nearly two-month low.
These developments exerted downward pressure on major U.S. stock indices, with the S&P 500 declining by 0.9% to 4,967.23 points and the NASDAQ Composite sliding by 2.1% to 15,282.01 points on Friday. However, the Dow Jones Industrial Average managed to eke out a 0.6% gain to reach 37,986.40 points, buoyed by strength in sectors outside of technology, including financials, consumer discretionary, and industrials. Notably, American Express (NYSE:AXP) contributed significantly to the Dow’s performance following robust first-quarter earnings.
Over the past week, the S&P 500 and the NASDAQ experienced declines of 3.5% and 6.1%, respectively, while the Dow remained relatively stable.
As the new week dawned, market participants awaited key economic indicators that could offer insights into the health of the U.S. economy. Notably, purchasing managers index (PMI) data for April and the personal consumption expenditures (PCE) price index were set to be released. The latter, serving as the Federal Reserve’s preferred measure of inflation, was expected to shed light on inflation trends and could influence the central bank’s future monetary policy decisions.
