US Stocks On Backfoot Amid Overbought Levels, S&P 500 Eyes Break Above 5K: Analyst Sees ‘Dramatically Higher’ Market Surge From Rally This Year



U.S. stock futures suggest a subdued start for Wall Street on Thursday amidst anticipation of more earnings reports. The Dow may find support from Walt Disney Co.’s (NYSE:DIS) premarket rally following a quarterly earnings beat, while bond yields hover above 4.1%. Oil is up for a fourth straight session, potentially lifting energy stocks.

Focus now shifts to the jobless claims report for labor market insights, with market overbought levels prompting a defensive stance. The S&P 500 nears the psychological 5,000 mark, awaiting momentum confirmation.

Cues From Wednesday’s Trading:

U.S. stocks surged to record highs on positive earnings and comments from Federal Reserve officials. Major averages opened higher, consolidating later. Dow and S&P 500 closed at records, the Nasdaq Composite hit a 25-month high, and the Nasdaq 100 Index reached a new peak.

Nine of 11 S&P 500 sectors closed higher, led by IT, consumer discretionary, and communication services. Real estate and consumer staple sectors saw modest weakness.

US Index Performance On Wednesday

Performance (+/-)

Nasdaq Composite

S&P 500 Index

Dow Industrials

Russell 2000

Analyst Color:

The market breadth will likely improve, according to comments from economic David Rosenberg. He shared a chart showing the earnings growth split between the “Magnificent Seven” stocks and the remaining 493 S&P 500 companies, which showed contribution from the former offsetting the negative growth of the latter.

The Magnificent 7 drove the S&P 500 last year while the remaining 493 companies fell by the wayside. This year will be a different story, with …

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