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Stock market today: Stocks set for rebound as Wall Street weighs hot inflation's impact on Fed

US stock futures edged higher on Friday, putting a weekly win within reach as investors weighed the impact of hot inflation prints on the Federal Reserve’s policy decision next week.

S&P 500 (^GSPC) futures put on 0.2%, and those on the Dow Jones Industrial Average (^DJI) added 0.2%. Contracts on the tech-heavy Nasdaq 100 (^NDX) also gained around the same amount.

Stocks are tentatively set to recover from Thursday’s across-the-board losses, which came as another hotter-than-expected inflation report spooked investors into rethinking bets on a June interest rate cut. But with other factors in play, the market has turned more upbeat despite concerns that “sticky” inflation could turn out harder to cool than the Fed expected, which would undermine the case for rate cuts.

With no big data releases on Friday’s docket, eyes are turning to the February PCE report — the Fed’s preferred inflation measure — for more clarity on whether inflation is cooling as fast as it wants. But that reading won’t come until near the end of March, after the central bank’s policy decision next week.

Meanwhile, bitcoin (BTC-USD) pulled back further from its latest record high above $73,000, trading just below $67,000 at last check. Crypto-related stocks lost ground alongside the token, with MicroStrategy (MSTR) down 5% and Coinbase (COIN) shedding almost 6% in premarket.

Elsewhere in corporates, Adobe (ADBE) shares fell over 11% after its downbeat quarterly sales forecast fueled worries about competition from AI startups.

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    Chart of the Day: AI enthusiasm rages on

    The AI trade has a friend in Goldman Sachs’ research team.

    Interesting work out today by Goldman’s Ryan Hammond, examining the different phases of the AI trade. While that was interesting to read, I was again struck by simply how popular the AI topic remains.

    Calls out Hammond:

    “Initial ebullience about AI in 2023 drove a massive increase in public and investor focus on AI, as measured by search volumes and news stories. These measures plateaued in 2H 2023, albeit at a high level, but have surged again in 2024. Similarly, the share of S&P 500 companies mentioning AI on earnings calls dipped slightly from 35% in 2Q 2023 to 31% in 3Q 2023. However, the share increased to 37% in 4Q 2023, led by Info Tech and Comm Services.

    Interest in all things AI remains high.

    Interest in all things AI remains high. (Goldman Sachs)

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