Wall Street Eyes Strong Finish To Week As Focus Turns To Fed Chair Powell's Speech: Analyst Tells Why S&P 500 Rally This Year Is 'Perfectly Normal'

U.S. stocks are on track to start higher yet again on Friday as rate-cut optimism continues to prop up investor sentiment. Traders may keep an eye on Capitol Hill, where the House is set to vote on a key funding bill by the Friday deadline to avert a government shutdown.

With the Federal Reserve’s blackout period over, speeches by Fed officials are back in focus. Market participants will likely be glued to their comments for more clarity on the future path of interest rates.

Earnings news has been mixed, potentially neutralizing its impact on the market. The mood across global markets is also mixed following their recent strong performance.

Cues From Previous Session:

The Fed-induced gains from Thursday were sustained as traders digested a string of fairly strong economic data. The Dow Industrials advanced early before consolidating for the rest of the session. While the tech-heavy Nasdaq Composite and broader S&P 500 Index gave back some early gains and closed off their highs, sentiment in the tech space was dampened by the pullback in Apple, Inc. (NASDAQ:AAPL) shares following the antitrust lawsuit. However, some support came from Reddit, Inc.’s (NYSE:RDDT) debut, with its stock rallying over 48% on Thursday.

All three major indices closed at fresh intraday and closing highs. However, the standout performers were small-cap stocks, with the Russell 2,000 Index settling higher by over 1%. Nine of the 11 S&P sectors advanced on Thursday, led by financials and industrials. Communication services and utility stocks, however, experienced some weakness.

Analyst Color:

Carson Group’s Ryan Detrick gave one more reason to stay invested in stocks despite the record run. He noted that if the broader market was negative in the midterm year, like in 2022, it was quite normal to have abnormal gains.

“When stocks fall in a midterm year (like ’22) then very strong returns the next two years are perfectly normal,” he said. The S&P 500 Index is up about 10% this year on top of the 25% gain in 2023, he noted.

Futures Performance On Friday ( as of 7 a.m. EDT)

In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.16% to $523.03, and the Invesco QQQ ETF (NASDAQ:QQQ) climbed 0.12% to $446.41, according to Benzinga Pro data.

Upcoming Economic Data:

Fed Chair Jerome Powell is scheduled to take part in a Fed listens event at 9 a.m. EDT.

Fed Vice Chair for Supervision Michael Barr will speak at noon EDT.

Atlanta Fed President Raphael Bostic is due to make a public appearance at 4 p.m. EDT.

See also: Best Futures Trading Software

Stocks In Focus:

• FedEx Corporation (NYSE:FDX) jumped over 12% in reaction to its earnings announcement, while Lululemon Athletica Inc. (NASDAQ:LULU) plunged nearly 13% and NIKE, Inc. (NYSE:NKE) moved down over 6%.
• Tesla. Inc. (NASDAQ:TSLA) fell nearly 3% amid reports that the company has cut production in China amid tepid demand.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures rose and traded at $81+ level, while gold futures are slipping after a two-session rally. The 10-year Treasury bond yield was rangebound around the 4.24% level. Bitcoin (CRYPTO: BTC) traced a downward path yet again and traded under the $65,000 level.

Among the global equity markets, Asian stocks meandered to a mixed close, with China and Hong Kong retreating amid fears of U.S. regulatory clampdown hurting domestic companies. The European markets traded mostly lower in early trading.

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