Traders on the floor of the NYSE, Oct. 21, 2022.
Source: NYSE
Stock futures were slightly lower Thursday evening as investors awaited earnings reports from a slate of big banks.
Futures tied to the S&P 500 fell 0.09%. Dow Jones Industrial Average futures inched lower by 43 points, or 0.1%, and Nasdaq 100 futures slipped 0.06%.
In regular trading, the S&P 500 climbed 0.85%. The Nasdaq Composite advanced 1.58%, lifted by Nvidia and Alphabet. The Dow added 47.71 points, or 0.14%. Thursday was the fourth consecutive day of gains for the major averages, and marked the highest close for the Nasdaq and the S&P 500. All three indexes are on pace for a winning week.
The latest producer price index report showed inflation rose less than anticipated and built on trader optimism from the June consumer price index data, which came out the day before. Investors are now considering whether a strong economy illustrated by the recent data could push stocks higher by the end of the year.
“Most stock and bond index prices rose today as economic data indicates inflation has fallen quickly and the labor market remains strong,” Bill Merz, senior investment director at U.S. Bank Wealth Management. “Optimism that inflation will continue to fall prompted investors to bid up stocks as we await second-quarter earnings results. Investors also bid up bond prices as investors now anticipate only one more rate hike from the Federal Reserve before they begin cutting rates in early 2024 based on interest rate pricing.”
Indeed, the second half of the year could still be a strong one.
“Regardless of how much volatility we end up seeing, given the year-to-date strength and the macroeconomic challenges, we’d expect the calls for second-half underperformance to get even louder,” said Baird’s Ross Mayfield. “Amid the noise, just remember that a strong start to the year is a bullish signpost – not a bearish one – and has preceded solid second half performance far more often than not.”
On a weekly basis, the three major averages are well on their way to gains. The S&P 500 is up 2.5% on the week, while the Dow is up 1.9%. The Nasdaq Composite is the outperformer, leaping 3.5% and on pace for its best week since March 17.
JPMorgan, Wells Fargo, Citi, BlackRock and State Street are all scheduled to report second-quarter earnings Friday morning. UnitedHealth will also give its quarterly update.
Traders will also be watching for June import prices and preliminary July results from the latest University of Michigan consumer sentiment report, both due out in the morning.
