U.S. stocks could see a pause on Friday as traders take a breather following the impressive rally on Thursday, sparked by Nvidia Corp.’s (NVDA) strong quarterly results. Additionally, comments from Federal Reserve Governor Lisa Cook after the market closed reinforced the central bank’s stance of holding off on rate cuts until inflation shows a sustained decline. Cook emphasized the need for greater confidence in inflation converging towards the 2% target before considering rate cuts.
The lack of significant economic data on Friday might lead to indecision among traders, particularly as they absorb Thursday’s gains.
Thursday’s Market Recap:
Nvidia’s earnings ignited a significant upward surge in the markets on Thursday. Major indices opened higher with a gap and maintained steady growth throughout the session. Economic data presented mixed signals, with manufacturing activity exceeding expectations in February while the service sector showed a slowdown.
Other notable data points included a surprise decline in weekly jobless claims and slightly higher-than-expected existing home sales for January.
The Nasdaq Composite closed above the 16,000 mark for the first time since Nov. 19, 2021, while the S&P 500 Index and the Dow Jones Industrial Average reached new record highs.
The market witnessed broad-based strength, except for defensive utility stocks which closed lower. IT stocks led the gains, followed by communication services, consumer discretionary, industrial, healthcare, and financials.
Larry Tentarelli, Chief Technical Strategist at Blue Chip Daily Trend Report, observed that 55 stocks, representing 10% of the S&P 500 companies, reached new all-time highs, including several bellwether stocks. He also noted that the Health Care Select Sector SPDR Fund XLI, Health Care Select Sector SPDR Fund XLV and VanEck Semiconductor ETF SMH achieved new 52-week highs, along with the Invesco S&P 500 Equal Weight ETF RSP.
Tentarelli characterized the market movement as “a very constructive breakout,” further confirmed by the S&P 500 Advance-Decline line reaching a new record high, indicating broad market participation.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +2.96% | 16,041.62 |
| S&P 500 Index | +2.11% | 5,087.03 |
| Dow Industrials | +0.13% | 38,612.24 |
| Russell 2000 | +0.96% | 2,013.84 |
Analyst Color:
After Thursday’s Nvidia-induced rally, an analyst began factoring in the possibility of the market outperforming even if the Fed does not cut rates. “The major catalyst for markets, absent rate cuts throughout the year, would by necessity be earnings, and here NVIDIA wowed investors and traders alike. AI came to life for global markets wondering if it was just a passing phase,” said Quincy Krosby, Chief Global Strategist at LPL Financial.
Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, did not agree with Krosby. “We expect the momentum to continue and for markets to melt up in the short run, but the story of the stock market for this year will eventually be about the economy (e.g. whether or not we go into recession) and the Federal Reserve (e.g. whether they cut interest rates or perhaps even raise them again),” he said.
Futures Today
Futures Performance On Friday (as of 7:05 am ET)
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.10% |
| S&P 500 | +0.02% |
| Dow | +0.12% |
| R2K | -0.33% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY rose 0.07% to $507,86 and the Invesco QQQ ETF QQQ edged down 0.02% to $438, according to Benzinga Pro data.
Upcoming Economic Data:
No economic report of significance is due for Friday.
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Stocks In Focus:
- Block, Inc. SQ shares rose over 16% in premarket trading after the Jack Dorsey-led company reported a surprise profit for its fourth quarter.
- Other companies moving on earnings are Carvana Co. CVNA (up over 31%), Insulet Corporation PODD (down over 3.6%), Maravai LifeSciences Holdings, Inc. MRVI (up over 21%), Live Nation Entertainment, Inc. LYV (up about 3.75%), Booking Holdings Inc. BKNG (down over 8.75%), MercadoLibre, Inc. MELI (down over 7%) and Noble Corp Plc. NE (down over 4%).
- E.W. Scripps Company SSP, Bloomin’ Brands, Inc. BLMN and Warner Bros. Discovery, Inc. WBD are among the notable companies due to report their quarterly results ahead of the market open.
- Nvidia rose over 1.40%, extending the momentum from the previous session.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures slipped 1.63% to $77.33 in early European session on Friday, giving back all of the 0.90% gain it made on Thursday. The benchmark 10-year Treasury note rose 0.008 percentage points at 4.335%.
The buoyancy seen in Asia ahead of Nvidia’s earnings tempered on Friday, with the domestic markets ending on a mixed. The Japanese market remained closed on account of a public holiday. While Hong Kong, India, Indonesia and Singapore receded, the rest of the markets posted modest gains, led by the Chinese market.
Economic data out of China showed that the year-over-year decline in property prices accelerated in January and this potentially increased hopes of more stimulatory measures from the government.
European markets traded mixed by late-morning trading on Friday. The German market was marginally higher after final estimates confirmed that the country’s economy contracted by 0.3% in the fourth quarter. The U.K. market fell, while France’s CAC 40 was up moderately. The Euro STOXX 50 rose 0.25% at the last check.
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