U.S. stocks could open on a tentative note on Thursday after the averages scaled record highs last week. Futures of all three major indices were slightly up as investors processed the crucial Consumer Price Index (CPI) data released on Wednesday.
After scaling a peak of 44,000 on Monday, Dow Jones and other major indices witnessed a minor pullback as investors maintained a cautious stance and booked profits.
| Futures | Change (+/-) |
| Nasdaq 100 | 0.08% |
| S&P 500 | 0.10% |
| Dow Jones | 0.13% |
| R2K | 0.74% |
In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY edged up by 0.09% to $597.70 and the Invesco QQQ ETF QQQ gained 0.04% to $512.46, according to Benzinga Pro data.
Cues From Last Session:
U.S. stocks ended Wednesday on a mixed note, with the Dow Jones and S&P 500 closing the day in green, while the tech-heavy Nasdaq registered a decline.
Crude oil prices remained under the $70 mark but continued to edge up due to concerns about strained supply.
Treasury yields edged up again as investors wait for Federal Reserve chair Jerome Powell's speech on the economic outlook.
On the economic data front, the U.S. annual inflation rate rose to 2.6% in October from 2.4% in the previous month, which is in line with market estimates. The CPI rose 0.2% month-over-month in October.
Most sectors on the S&P 500 closed on a positive note, with consumer discretionary, energy, and real estate stocks recording the biggest gains on Wednesday.
However, information technology and communication services stocks bucked the overall market trend, closing the session lower.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.26% | 19,230.73 |
| S&P 500 | 0.02% | 5,985.38 |
| Dow Jones | 0.11% | 43,958.19 |
| Russell 2000 | -0.94% | 2,369.37 |
Insights From Analysts:
Jeremy Schwartz, chief investment officer at WisdomTree, said that the CPI data was "even better than reported."
To explain this, he used more real-time data to note that the headline inflation fell from 2.6% to 1.3%.
"The Fed should continue recalibrating to neutral," said Schwartz.
CME Group's FedWatch tool reflected this positive sentiment for another rate cut next month, with its probability rising from 60% to 70%.
Sonu Varghese, Vice President at Carson Group, downplayed fears of a rebound in inflation, stating that there are "disinflationary trends" that will "likely keep a lid" on a rise in prices.
On the other hand, analysts at BlackRock Investment Institute expressed caution on inflation.
"We focus on U.S. CPI to see if inflation will keep falling toward the Fed's 2% target. Short-term inflation has been decreasing, with immigration boosting the labor supply and cooling wage growth. However, recent services PCE data remains sticky, indicating that inflation may settle above 2% in the medium term."
On the equity front, though, Varghese expressed a bullish outlook.
"Overall, economic strengths clearly outweigh areas of weakness, and the opportunities likely have a higher probability of coming to fruition than the threats. The balance favors continued strength for equities, which is why we're maintaining our overweight to stocks, especially US stocks."
WisdomTree and Wharton School economist Jeremy Siegel echoed similar sentiments.
"The ‘bull market' sentiment remains intact, though valuations remain a watch point," he said, adding that the expectations of "lighter regulations" from President-elect Donald Trump's administration would benefit equities.
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Upcoming Economic Data
Thursday's economic calendar includes the release of additional inflation-related data.
- Federal Reserve Gov. Adriana Kugler will speak at 7 a.m. ET.
- Initial jobless claims data and Purchasing Power Index (PPI) will be released at 8:30 a.m. ET.
- Federal Reserve Chair Jerome Powell will speak at 3 p.m. ET.
- New York Fed President John Williams will speak at 4:15 p.m. ET.
Stocks In Focus:
- Super Micro Computer Inc. SMCI shares fell over 9% in premarket trading on Thursday after the company said it needs more time to file its quarterly report.
- ASML Holding NV ASML shares gained 3% in premarket trading after the company maintained its 2030 targets.
- MicroStrategy Inc. MSTR and Robinhood Markets Inc. HOOD shares continued to surge after Bitcoin BTC/USD crossed the $90,000 mark.
- Cisco Systems Inc. CSCO shares fell over 4% after the company reported a fall in earnings on a year-on-year basis.
- JD.com Inc. JD shares fell over 4% after the company missed analyst expectations.
- Investors are awaiting earnings results from The Walt Disney Company DIS, Advance Auto Parts, Inc. AAP, and Applied Materials, Inc. AMAT today.
Commodities, Bonds And Global Equity Markets:
Crude oil futures surged in the early New York session, rising by 0.42% to hover around $68.72 per barrel.
The 10-year Treasury note yield edged up about to 4.457%.
Most of the major Asian markets ended in the red on Thursday, but European markets were in the green in early trading.
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