It's a tale of two markets this morning. While the Dow Jones Industrial Average futures are pointing to a modest gain, the tech-heavy Nasdaq 100 and the broader S&P 500 are sliding again, extending the week's selloff. Investors are digesting a fresh batch of economic data that suggests the economy is running hotter than expected, which could keep the Federal Reserve on hold for a while longer.
On the macro front, the Personal Consumption Expenditures (PCE) Index — the Fed's preferred inflation gauge — came in at its hottest level since October 2023. At the same time, the Bureau of Economic Analysis revised first-quarter GDP up to 2.1% from the previous estimate of 1.7%. That's a solid growth number, but it also adds to the narrative that the economy doesn't need much help from lower rates right now.
The bond market is reflecting that reality: the 10-year Treasury yield is at 4.378%, while the two-year sits at 4.094%. According to the CME Group's FedWatch tool, markets are pricing in a 72.2% chance that the Fed leaves rates unchanged at its July meeting. In other words, don't hold your breath for a cut.
Here's how the major index futures are shaping up ahead of the open:
The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100, respectively, are both lower in premarket. SPY is down 0.51% at $730.53, while QQQ has fallen 1% to $709.20.
Stocks In Focus
Apogee Enterprises
Apogee Enterprises Inc. (APOG) is up 2.4% in premarket trading ahead of its quarterly earnings report. Analysts expect the company to post earnings per share of $0.45 on revenue of $333.84 billion. Market data indicates that APOG maintains a strong price trend in the short, long, and medium terms, with a moderate growth score.
Synaptics
Synaptics Inc. (SYNA) announced a definitive agreement to combine its business with ON Semiconductor Corp. (ON). Shares of Synaptics jumped 5.56% in premarket trading. Market data shows SYNA maintains a strong price trend across all time frames.
Beyond Air
Beyond Air Inc. (XAIR) is expected to report a loss of $0.57 per share on revenue of $2.3 million before the opening bell. Despite the anticipated loss, shares are up 3.12% in premarket.
Apple
Apple Inc. (AAPL) shares are edging up 0.14% in premarket, recovering slightly from a 6.15% plunge on Thursday. The tech giant is in focus after announcing price hikes across its product lineup, citing rising memory and storage costs. Market data indicates that AAPL maintains a strong price trend in the short, long, and medium term, with a good quality score.
Cineverse
Cineverse Corp. (CNVS) shares rose 4.1% in premarket ahead of its quarterly results. The company is expected to report a loss of $0.01 per share on revenue of $21.86 million. Market data shows CNVS maintains a strong price trend in the short and medium terms, but a weak trend in the long term.
Cues From Last Session
Most sectors on the S&P 500 closed in the red on Thursday, with industrials, health care, and materials posting the biggest gains. Consumer discretionary, consumer staples, and communication services were the laggards. Here's how the major indices finished:
Insights From Analysts
Analysts at Schwab Center for Financial Research (SCFR) say investors are focused on whether strong earnings from Micron Technology Inc. (MU) are enough to revive confidence in AI-related stocks. While the memory chipmaker's results boosted semiconductor shares, SCFR notes that concerns persist around the returns on massive AI investments, crowded positioning in chipmakers and hyperscalers, and the possibility of slowing compute demand.
SCFR's Chief Investment Strategist Liz Ann Sonders said one strong earnings report is unlikely to negate the factors behind the recent unwind in AI stocks. At the same time, the firm noted that improving market breadth and rotation into sectors such as industrials, health care, and energy suggest investors are broadening beyond mega-cap technology.
On the macro front, SCFR's head of fixed income research and strategy, Collin Martin, said May's inflation data likely gives the Federal Reserve room to remain patient. While the latest PCE report matched expectations, Martin said policymakers now have time to assess how inflation evolves over the coming months before making their next rate decision.
Upcoming Economic Data
Here's what investors will be watching on Friday:
- May's advance economic indicators report, along with May's wholesale and retail inventories data, will be released at 8:30 a.m. ET.
- June's final University of Michigan consumer survey data will be out at 10:00 a.m. ET.
Commodities, Crypto, And Global Equity Markets
Crude oil futures are trading lower in the early New York session, down 2.21% to around $70.33 per barrel. Gold is flat at $4,027.475 per ounce, while the U.S. Dollar Index is slightly lower at 101.41.
Bitcoin (CRYPTO: BTC) is trading 2.08% lower over the last 24 hours at $60,490.12.
Asian markets closed lower on Friday, with Hong Kong's Hang Seng, Japan's Nikkei 225, China's CSI 300, and South Korea's Kospi all declining. European markets are also lower in early trade.
