Stocks look jaded after their record run, with the stock futures pointing to a modestly lower opening in the week’s final trading session. Given the recent gains, some consolidation can be expected before traders plot their next move. Analysts have been sounding out optimism over the broadening of the market rally as small-cap stocks join the party.
Specifically, on Friday, traders could stay focused on a slew of Fed speeches, trying to read between the lines and draw cues regarding what the central bank could do at the March meeting. A couple of manufacturing activity data and a consumer sentiment reading may also be on investors’ radar. Bond yields dipped as traders reassessed their rate-cut odds after the inflation data.
Cues From Thursday’s Trading Session
U.S. stocks advanced on Thursday as the Fed’s preferred inflation gauge – the core personal consumption expenditure index aligned with expectations. The mixed earnings news flow also dictated market sentiment.
The major indices opened higher, encouraged by the inflation component of the January personal income and spending report. But the optimism tempered through the morning, with the Dow Industrials trading mostly below the unchanged line. The 30-stock blue-chip average moved decisively above the unchanged in the final hour of trading as it snapped a three-session losing streak. Yet it closed off its all-time highs.
The Nasdaq Composite and the S&P 500 Index returned their gains and briefly dipped below the unchanged line in the mid-session before recovering and taking off in the afternoon. Both averages ended in unchartered territory, with the former scaling its previous closing high of 16,057.44 set on Nov. 19, 2021.
Eight of the 11 S&P 500 sectors closed in the green, with communication services, consumer discretionary, IT, material, and real estate stocks leading from the front. On the other hand, consumer staple and healthcare stocks fell sharply, and financial stocks closed with a slight negative bias.
Small-caps rebounded from their previous session’s losses. After trading solidly higher in early trading, they gave back much of their gains over …
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