The excerpt provides a comprehensive snapshot of the evening trading session on Thursday in the U.S. stock market, shedding light on the movements of stock index futures and Wall Street indexes, as well as the underlying factors influencing investor sentiment.
During the evening trading session, U.S. stock index futures saw slight gains, building upon a positive performance observed earlier in the day on Wall Street. This upward momentum was attributed to emerging indications of a cooling labor market, which prompted a decline in Treasury yields. Investors appeared to maintain their expectations that the Federal Reserve would initiate interest rate cuts by September, although the upcoming release of inflation data was anticipated to be a crucial factor in shaping this outlook.
S&P 500 Futures exhibited a marginal increase of 0.1%, reaching 5,244.50 points, while Nasdaq 100 Futures also edged up by 0.1% to 18,235.75 points. Similarly, Dow Jones Futures recorded a modest gain of 0.1%, climbing to 39,592.0 points by 19:45 ET (23:45 GMT).
On Wall Street, the trading session witnessed gains across major indexes, with the Dow achieving a notable feat by marking its seventh consecutive day of increases. This positive trend was propelled by a larger-than-expected rise in weekly unemployment claims, which reinforced the perception of a gradual slowdown in the labor market. Consequently, this release of labor market data exerted downward pressure on Treasury yields, with the 10-year rate experiencing a notable decline of 0.8%.
The S&P 500 index demonstrated resilience by rising by 0.5% to attain 5,214.08 points, while the NASDAQ Composite also experienced modest gains, increasing by 0.3% to reach 15,346.27 points. Notably, the Dow Jones Industrial Average exhibited significant strength, surging by 0.9% to reach 39,387.76 points.
However, despite the prevailing sentiment regarding potential rate cuts by the Federal Reserve, concerns about persistent inflationary pressures lingered in the background. Market participants awaited the forthcoming release of the consumer price index (CPI) inflation data for April, with expectations of moderation following several months of elevated readings. Nevertheless, projections suggested that the data would likely remain above the Federal Reserve’s 2% target, adding to uncertainties about the trajectory of monetary policy.
Earlier in the week, several Federal Reserve officials had cautioned about the persistence of inflationary pressures, hinting at the likelihood of prolonged high interest rates. However, the prospect of additional rate hikes was deemed improbable. According to the CME Fedwatch tool, traders were pricing in a nearly 50% chance of a 25 basis point rate cut by the Federal Reserve in September.
In aftermarket trading, attention was drawn to notable movers, including Akamai Technologies Inc and Unity Software Inc. Akamai Technologies experienced a decline of 10.6% following the release of disappointing guidance for the current quarter and for 2024. Similarly, Unity Software Inc witnessed a decline of nearly 5% after reporting quarterly earnings per share that fell short of estimates.
Overall, the dynamics observed in the market reflected a delicate balance between optimism surrounding signs of a cooling labor market and concerns about stubborn inflationary pressures. Market participants remained vigilant, closely monitoring upcoming economic data releases and corporate earnings reports for further insights and guidance.