Nasdaq Index, Dow Jones, S&P 500 News: Futures Rise Ahead of Inflation Data
In premarket trading, Nike shares dropped over 14% after the athletic retailer lowered its full-year guidance. This decline also impacted Foot Locker, whose shares fell 5.3% in sympathy. These moves came ahead of the anticipated release of the core PCE index, an inflation measure closely watched by the Federal Reserve.
Importance of PCE Data
The headline PCE reading is expected to remain flat from April, showing a 2.6% increase compared to a year ago. Excluding food and energy, the core PCE is forecast to rise 0.1% month-over-month and 2.6% year-over-year. These inflation statistics are crucial as market participants gauge when the Federal Reserve might start cutting interest rates. Additionally, traders will monitor reports on spending, personal income, and consumer sentiment, all set for release on Friday morning.
First Half Performance of 2024
As the first half of 2024 concludes, the technology-heavy Nasdaq Composite has surged approximately 19%, driven by investor enthusiasm for artificial intelligence. The S&P 500 has jumped nearly 15%, while the Dow has lagged with a gain of just under 4%. AI has significantly boosted market concentration, leading to a strong performance this year.
Market Forecast
Given the current factors driving the price action and anticipated data releases, a bullish outlook for the short term appears likely. The technology sector, particularly driven by AI advancements, is expected to continue its strong performance, potentially lifting the overall market. However, traders should remain cautious of any unexpected inflation data that could influence Federal Reserve policies and market sentiment.