Nasdaq, S&P 500 Set For Strong Open As Nvidia AI Conference Buzz Eclipses Fed Jitters: Analyst Tells Why Investors Should Shrug Off March Slackness

by | Mar 18, 2024 | Markets

Traders seem poised to overlook their inflation concerns as they anticipate the Federal Open Market Committee meeting scheduled for the week with optimism. Early Monday, stock futures showed mostly upward movement, with the tech sector potentially leading the way. Nvidia Corp.’s (NASDAQ:NVDA) GTC 2024, featuring CEO Jensen Huang‘s keynote, and the possibility of a partnership between Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Apple, Inc. (NASDAQ:AAPL), are expected to boost sentiment.

However, bond yields are on the rise, reflecting lingering concerns about a hawkish message from the upcoming Federal Reserve meeting.

Cues From Last Week’s Trading:

Higher-than-expected consumer and producer price inflation data led to the major indices posting their second consecutive weekly losses. Small-cap and tech stocks were particularly affected, with all three major indices closing lower in the week ending March 15. The broader S&P 500 Index reached intra-day and closing highs on Tuesday before retracing following the release of the inflation data.

The week also witnessed a spike in bond yields due to tempered expectations of rate cuts, accompanied by a sharp increase in the CBOE Volatility Index (VIX).

Fund manager Louis Navellier commented on the week’s developments, stating, “The strong rally in equities since the end of October is finally showing some fatigue.” He noted that gains have slowed as expectations for Fed rate cuts are being pushed back, with June now the expected timeframe for the first rate cut, reflecting a 60% probability.

Index Performance (+/-) Value
Nasdaq Composite -0.70% 15,973.17
S&P 500 Index -0.13% 5,117.09
Dow Industrials -0.02% 38,714.77
Russell 2000 -2.08% 2,039.32

Analyst Color:

Weighing in on the market weakness, Carson Group’s Ryan Detrick highlighted historical data that should offer some consolation to traders. “Election years tend to be weak into late March,” he said, sharing a chart on X to substantiate his claim.

Quincy Krosby, LPL Chief Market Strategist said, “Fed meeting could determine the direction for the market, particularly if the Fed telegraphs that rates need to remain steady, even for just a bit longer.”

“That could be what’s needed to allow this market to absorb gains and consolidate before the new earnings season begins.”

Futures Today

Futures Performance On Monday ( as of 7 a.m. EDT)

Futures Performance (+/-)
Nasdaq 100 +0.80%
S&P 500 +0.42%
Dow -0.08%
R2K -0.05%

In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.37% to $511.73, and the Invesco QQQ ETF (NASDAQ:QQQ) climbed 0.77% to $436.68, according to Benzinga Pro data.

Upcoming Economic Data:

The week’s economic events will be headlined by the two-day FOMC meeting that kickstarts on Tuesday. The committee under the chairmanship of Jerome Powell will announce the verdict through the release of a post-meeting policy statement at 2 p.m. EDT on Wednesday. The central bank will also release along with it the Summary of Economic projections, which comprises the dot-plot curve.

Powell will host a press conference on the same day at 2:30 p.m. EDT to share further insights into the rate decision and the rate outlook.

The week will also witness the release of a slew of housing market reports, a few private-sector activity data, Fed speeches, and the routinely scheduled jobless claims data.

On Monday at 10 a.m. EDT, the National Association of Home Builders will release its housing market index for March. The index, a measure of homebuilder confidence, is expected to remain steady at 48, with a reading below ’50’ reflecting an unfavorable outlook on home sales.

See Also: How To Trade Futures

Stocks In Focus:

  • Nvidia rose over 2% in premarket trading ahead of the company’s GTC 2024.
  • Alphabet gained about 2.40% on the Bloomberg report that said Apple is in talks for using the former’s Gemini to power iPhone’s AI features.
  • Embraer S.A. (NYSE:ERJ), Science Applications International Corporation (NASDAQ:SAIC) and StoneCo Ltd. (NASDAQ:STNE) are among the companies due to release their quarterly results Monday.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures rose 0.83% to $81.28 in premarket trading following their 3.9% advance in the week ended March 15. Gold futures edged up, although they still trade off the record highs.

The yield on the 10-year Treasury bond edged up to 4.308% and Bitcoin (CRYPTO: BTC) traded just above the $68,000 level, off the $73,000+ mark it hit last week.

Most Asian markets rallied, led by Japan, as investors looked ahead to interest rate decisions from major global central banks. Mostly positive economic data from China also supported sentiment. European stocks posted uneasy gains in early trading.

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