Thursday May 26th


Dow futures gain as the market tries to snap long weekly losing streaks

U.S. stock index futures rose slightly Thursday, as Wall Street tried to rebound from a long string of weekly declines. Dow futures rose 141 points, or 0.4%. S&P 500 climbed 0.4%. Nasdaq advanced 0.1%. The Dow has fallen the last eight weeks, while the S&P 500 and Nasdaq are riding seven-week losing streaks. However, the market seems to have somewhat regained its footing this week, as investors hope inflation is starting to peak and that there’s good value to be found at these levels. The Dow and S&P 500 are up 2.75% and 2%, respectively, for the week. The Nasdaq is also up 0.7%. The Dow has also posted gains in the last four sessions. “Recent one-day rallies have been aggressively sold the next day, which is why global markets holding up (despite NVDA and SNOW being lower) would be a short-term positive,” 22V Research’s Dennis DeBusschere said in a note Thursday. “U.S. equity futures are stable with yields lower across the curve and inflation expectations continue to grind lower,” he added. “Investors are discounting that the tightening of financial conditions over the past 6ish months is enough to slow economic growth meaningfully. That is consistent with the decline in the breadth of U.S. economic data points.” The move in futures comes after strong earnings from the retail sector. Macy’s shares surged 15% in premarket trading after the company raised its 2022 profit outlook, and Williams-Sonoma rose 8.3% after beating estimates on the top and bottom lines. Discount retailers Dollar Tree and Dollar General jumped 12% and 10%, respectively, after posting earnings beats. On the flipside, shares of chipmaker Nvidia dropped 5.6% in the premarket after the company delivered weaker-than-expected guidance for the second quarter and the company’s CFO said Nvidia would slow hiring. Similarly, software stock Snowflake tumbled 14% after the company’s guidance for operating margin came in narrower than expected. Though first-quarter earnings for the market as a whole have been largely in line with historical trends, there have been dramatic pullbacks for some major stocks after earnings reports as investors look for the impact of inflation and slowing economic growth. “If there’s any reason to sell, they’re embracing it,” said Jeremy Gonsalves, national director of portfolio management at BNY Mellon Wealth Management. Elsewhere, Twitter shares jumped more than 5% after Elon Musk increased his commitment in his takeover bid to $33.5 billion, which analysts have said indicates a new seriousness and increased probability that he’ll complete the deal. Chipmaker Broadcom announced plans to buy cloud company VMware in a $61 billion deal, which would be one of the biggest tech acquisitions of all time. Broadcom shares fell more than 1%, while VMWare shares inched higher. Stocks rose Wednesday, with the Nasdaq gaining 1.5% to lead the way. The S&P 500 added 0.9%, while the Dow gained 0.6%. Asia-Pacific stocks struggled for direction on Thursday after U.S. Federal Reserve meeting  minutes showed officials stressing the need to raise interest rates swiftly and potentially more than markets anticipated. Mainland Chinese stocks recovered from earlier losses as the Shanghai Composite closed 0.5% higher at 3,123.11 while the Shenzhen Component gained 0.571% to 11,206.82. Hong Kong’s Hang Seng index slipped around 0.7%, as of its final hour of trading. In Japan, the Nikkei 225 finished the trading day 0.27% lower at 26,604.84 while the Topix index rose fractionally to 1,877.58. South Korea’s Kospi dipped 0.18%, closing at 2,612.45. Oil prices rose on Thursday, extending a cautious rally this week on signs of tight supply while the European Union (EU) wrangles with Hungary over plans to ban imports from Russia, the world’s second-largest crude exporter, after it invaded Ukraine. Brent crude futures for July delivery advanced 88 cents, or 0.8%, to $114.91 per barrel. U.S. West Texas Intermediate (WTI) crude futures gained 99 cents, or 0.9%, to trade at $111.32 per barrel. Gold prices dropped on Thursday, with some investors cashing in after minutes of a U.S. Federal Reserve policy meeting showed that the central bank was likely to stay the course on interest-rate hikes. Spot gold dipped 0.5% to $1,843.29 per ounce. U.S. gold futures eased 0.29% to $1,841.