Nasdaq, S&P 500 Set For Modest Gains As Investors Eye August Inflation Data And ECB Rate Decision

U.S. stocks could open Thursday’s session modestly higher after the remarkable recovery they staged in the previous session. The spotlight is on the producer price inflation report for August as traders seek confirmation regarding a sustained downward move in inflation, and the weekly jobless claims report may also create some ripples. The market may also focus on an interest rate decision from across the Atlantic. The European Central Bank is widely expected to reduce rates and kickstart a coordinated cut by the global central banks amid a letup in inflation and growth slowdown. That said, some negative tidings from the tech space could lead to some selling.

Futures	Performance (+/-)
Nasdaq 100	+0.10%
S&P 500	+0.14%
Dow	+0.16%
R2K	+0.48%

In premarket trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE: SPY gained 0.22% to $555.64 and the Invesco QQQ ETF (NASDAQ: QQQ) rose 0.16% to $469.37, according to Benzinga Pro data.

Cues From Last Session:

Wall Street ended higher on Wednesday – a session marked with volatility in which the 30-stock Dow Jones Industrial Average moved in a 910-point range. After starting lower in reaction to what was perceived as a not-so-benign August consumer price inflation report and presidential debate held overnight, the averages fell further in early trading.

Positive comments on the potential of artificial intelligence technology by Nvidia Corp. NVDA CEO Jensen Huang at an industry conference kicked off a rally in the technology space and the broader market. IT stocks soared, leading the market higher, while communication services and consumer discretionary stocks also found buying interest. Defensive consumer staples and real-estate stocks lost ground, and financial and energy stocks extended their declines.

Index	Performance (+/)	Value
Nasdaq Composite	+2.17%	17,395.53
S&P 500 Index	+1.07%	5,554.13
Dow Industrials	+0.31%	40,861.71
Russell 2000	+0.31%	2,103.85

Insights From Analysts:

Carson Group Chief Market Strategist Ryan Detrick flagged a data point that holds out promise. While noting that the S&P 500 Index came back from a loss of 1.5% intraday to finish higher by over 1%, he said the last time this happened was exactly at the end of the vicious bear market in Oct. 2022.

“Looking at previous big reversal days like this shows better than average returns across the board,” he added.

The last time the S&P 500 was down >1.5%, but finished up >1%?

The exact lows at the end of the vicious bear market in Oct '22.

It happened again today.

Looking at previous big reversal days like this shows better than avg returns across the board. pic.twitter.com/mu8jPFEiNM

— Ryan Detrick, CMT (@RyanDetrick) September 12, 2024

See also: How To Trade Futures

Upcoming Economic Data:

• The Labor Department is scheduled to release the weekly jobless claims report at 8:30 a.m. EDT. Economists, on average, expect the number of individuals claiming unemployment benefits to come in at 225,000 in the week ended Sept. 7, slightly lower than the previous week’s 227,000.
• The Bureau of Labor Statistics is due to release its August producer price inflation report, also at 8:30 a.m. EDT. The consensus estimates are as follows:
  • PPI (m-o-m): 0.1%, flat with the July rate
  • PPI (y-o-y): 1.8%, down from 2.2% in July
  • Core PPI (m-o-m): 0.2% versus unchanged prices in July
  • Core PPI (y-o-y): 2.5%, up from 2.4% in July
• The Treasury will auction four- and eight-week notes at 11:30 a.m. EDT and 30-year bonds at 1 p.m. EDT.
• The Treasury is also due to release the federal budget balance report for August at 2 p.m. EDT, with the report widely expected to show of deficit of $285.7 billion compared to a deficit of $244 billion in July.

Stocks In Focus:

• Oxford Industries, Inc. OXM plunged over 10% in premarket trading following the company’s quarterly results.
• Kroger Co. KR and Signet Jewelers Limited SIG are scheduled to announce their quarterly results before the market opens, while Adobe Inc. ADBE is due after the market closes.
• Micron Technology, Inc. MU moved down over 2% on a negative analyst action.
• Moderna, Inc. MRNA slumped over 7% after the company announced cost-cutting initiatives.

Commodities, Bonds And Global Equity Markets:

Crude oil futures rose for a second straight session and gold futures traded flat around the $2,550 level, while Bitcoin BTC/USD rallied back above $58K. The 10-year yield rose 2.3 basis points to 3.676%.

Most Asian markets advanced, tracking the firmer close by Wall Street stocks, but China ended modestly lower. European stocks rose solidly in early trading, reacting to the post-noon recovery seen by U.S. stocks on Wednesday and hopes of an ECB rate cut. The decision is due at 8:15 a.m. EDT.

Read Next:

• ‘Didn’t Take Much For Nvidia To Get People Excited About AI,’ Says Strategist, After Jensen Huang Talks Up AI’s Potential Beyond Data Centers

Photo via Shutterstock