Why Dow, Nasdaq 100 Futures Signal Rebound In Today’s Session
An economist predicts a quarter-point cut at each of the October and December meetings, followed by a 50-75 basis-point cut by early next year as the Fed moves to a more neutral stance.
U.S. stocks appear on track to return to their winning ways, with major index futures up modestly early Wednesday. Micron’s (MU) strong earnings report, although not significantly lifting the memory chipmaker, could trigger some buying in artificial intelligence (AI) stocks.
Traders may also prefer to wait out some key data scheduled to be released over Thursday and Friday, which includes a key inflation gauge. As of 2:20 a.m. ET on Wednesday, the Dow futures, S&P 500, Nasdaq 100 and Russell 2000 futures were all up about 0.15%.
The S&P 500 and the Nasdaq Composite Index snapped a three-session record-making streak on Tuesday amid profit-taking, with consumer discretionary and techs dragging the averages. The Dow Jones Industrial Average fell for the first time in five sessions. Federal Reserve Chair Jerome Powell, for his part, dented sentiment by stating that stock valuations are high.
The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) fell 0.54% and 0.66%, respectively. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Shares Russell 2000 ETF (IWM) retreated 0.16=7% and 0.23%, respectively.
On the economic front, traders may focus on the Commerce Department’s new home sales report for August (10 a.m. ET). San Francisco Fed President Mary Daly is due to make a public appearance at 4:10 p.m. ET.
KB Home (KBH), Steelcase (SCS) and Worthington Steel (WOR) are among the companies due to announce their quarterly results on Wednesday.
WisdomTree Senior Economist Jeremy Siegel recommends buying small and mid-cap stocks, rate-sensitive securities, and high-quality dividend payers that benefit from lower discount rates and improving credit conditions. The expectation is based on his prediction of a quarter-point cut at each of the October and December meetings, followed by a 50-75 basis-point cut by early next year as the Fed moves to a more neutral stance.
“The 10-year should remain range-bound near 4% with a modest term premium; mortgage spreads can narrow further,” Siegel said.
Crude oil futures extended their gains from Tuesday, while gold futures pulled back from their all-time high. The 10-year U.S. Treasury note yield continued to slide, staying just above the 4.1% level. The U.S. dollar was firmer against most major counterparts.
For updates and corrections, email newsroom[at]stocktwits[dot]com.
The best trade ideas and analysis from the Stocktwits community. Delivered daily by 8 pm ET.