Dow Jones futures, along with S&P 500 futures and Nasdaq futures, fell slightly on Friday morning. This comes after BlackRock and UnitedHealth reported their earnings, and ahead of reports from JPMorgan Chase, Citigroup, Wells Fargo, and PNC Financial Services. Treasury yields fell back while crude oil spiked higher due to tightened sanctions on Russian crude sales.
The stock market rally retreated on Thursday due to a hotter-than-expected CPI inflation report and a poorly received 30-year Treasury auction. Investors should be closely monitoring the Nasdaq and S&P 500, as they are at key levels that could indicate whether to expand or reduce exposure. Among megacap stocks, Apple and Microsoft edged higher, while Google parent Alphabet and Meta Platforms fell from 52-week highs. Nvidia nudged higher, Amazon.com hit key resistance, and Tesla fell modestly.
UnitedHealth reported earnings and revenue that slightly beat expectations, causing UNH stock to edge higher. Blackrock’s earnings beat expectations while revenue was in line, resulting in a slight uptick in BLK stock. JPMorgan, Citigroup, Wells Fargo, and PNC Financial are set to report their earnings, with concerns about interest rates, investment banking, and deposits.
Dow Jones futures fell 0.2%, S&P 500 futures sank 0.3%, and Nasdaq 100 futures retreated 0.5%. The 10-year Treasury bond yield fell several basis points to 4.62% and crude oil futures jumped nearly 4%.
The stock market rally started slightly higher but reversed sharply lower as Treasury yields surged. The Dow Jones Industrial Average fell 0.5%, and the S&P 500 and Nasdaq composite sank 0.6%. Losers outnumbered winners, and the small-cap Russell 2000 and Invesco S&P 500 Equal Weight ETF tumbled. The major indexes are struggling at key levels, with the Nasdaq falling back below its 50-day line and the Dow Jones hitting resistance at the 200-day.
Growth ETFs, including Innovator IBD 50 ETF and ARK Innovation ETF, slumped, while VanEck Vectors Semiconductor ETF rose. Megacap stocks, such as Apple and Microsoft, saw mixed performances, while Google, Meta, and Nvidia experienced slight declines. Amazon.com hit resistance, and Tesla fell modestly.
Investors should be cautious and add exposure gradually, as the market seems to be hitting resistance. The S&P 500 and Nasdaq falling below their 21-day lines would be negative signs. However, a decisive move above the 50-day line for the Nasdaq could offer buying opportunities. Earnings season is about to begin, adding uncertainty to the market.
Overall, investors should closely monitor earnings reports and be prepared to adjust their positions accordingly. It is important to stay informed about the market direction and leading stocks and sectors by reading The Big Picture.