On Friday, U.S. stock index futures showed declines, reversing some of the gains seen earlier in the week. This shift came as investors processed a range of economic data and market developments that shaped sentiment across different sectors.
Throughout the week, the market had experienced notable movements. The S&P 500 and Nasdaq Composite had achieved record highs for four consecutive days by Thursday, propelled largely by strong performances in the technology sector. In contrast, the Dow Jones Industrial Average, which tends to be more sensitive to economic indicators, registered a slight decline.
The positive sentiment earlier in the week was bolstered by economic data that showed unexpected declines in factory prices during May, following softer consumer price index figures. These results fueled optimism among investors about the possibility of a disinflationary trend, which could potentially lead to lower interest rates by the end of the year. This data helped alleviate concerns raised earlier in the week when the Federal Reserve indicated a more hawkish stance than anticipated, projecting only one rate cut in 2024.
For the week as a whole, the S&P 500 was poised to gain 1.6%, while the Nasdaq showed a stronger increase of 3.1%. In contrast, the Dow Jones Industrial Average was on track to end the week with a 0.4% decline.
The technology sector continued to dominate market activity throughout the week, buoyed by significant announcements and developments. Apple’s unveiling of major advancements in artificial intelligence (AI) earlier in the week had initially sparked a rally in AI-related stocks. Adobe Systems, for instance, saw its stock surge by 15% in pre-market trading following strong earnings and an upward revision of its 2024 guidance, driven by robust demand for its AI-powered editing tools.
Tesla also garnered attention as its stock gained 1% in pre-market trading after shareholders approved a controversial $56 billion compensation package for CEO Elon Musk and the company’s decision to reincorporate in Texas.
In commodities, crude oil prices retreated slightly on Friday but were poised to record their strongest weekly performance in over two months. U.S. crude futures (WTI) traded at $78.27 per barrel, down 0.5%, while the Brent contract dropped 0.3% to $82.53 per barrel. Optimistic forecasts from OPEC regarding global oil demand growth in 2024, alongside bullish projections from Goldman Sachs on U.S. fuel demand for the summer, contributed to the positive sentiment in the oil market.
Overall, the market environment remains influenced by a delicate balance of economic data releases, Federal Reserve policy signals, and sector-specific developments. These factors collectively shape investor sentiment and drive market dynamics as the trading week draws to a close.