Dow Jones Futures: Stock Market Strong Before Inflation Data; Will Nvidia AI

Dow Jones futures were little changed Thursday evening, along with S&P 500 futures and Nasdaq futures, ahead of the Federal Reserve’s favorite inflation report. U.S. stock and bond markets will be closed Friday.

decisions on interest rates impact both the economy and the stock market. IBD News Editor Ed Carson shares how reactions by each can differ and what investors need to know.” vid-name=”Fed Interest Rate Decisions: Market Influence And Investor Psychology Impact Of Cuts And Hikes” vid-cat=”Industry Insights” vid-date=”03/20/2024″ vid-date-tmsp=”1710938202″ vid-image=”https://www.investors.com/wp-content/uploads/2024/03/cReAVOpP-640×360.jpg” vid-authors=”MEREDITH HEYMAN”
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The stock market rally enjoyed a solid, holiday-shortened week. Growth stocks, especially AI leaders such as Nvidia (NVDA), fell back somewhat, though they generally held above support. The market showed strength shrugging that off, with robust breadth. Small caps led with strong gains, with the Dow Jones and S&P 500 right at record highs. The Nasdaq edged lower as many tech giants retreated.

Nvidia needs more time, but Microsoft (MSFT), Meta Platforms (META) and CrowdStrike (CRWD) are tech leaders pulling back bullishly.

Meanwhile, new AI chip IPO Astera Labs (ALAB) is pulling back from Tuesday’s record high. A continued pause in Nvidia stock and AI plays could let ALAB stock forge a short IPO base.

Meanwhile, China EV makers Nio (NIO), Li Auto (LI) and XPeng (XPEV) are due to report March and first-quarter deliveries early Monday, April 1. EV giant BYD (BYDDF) should report a big rebound in March, either on Monday or Tuesday. Tesla (TSLA) will likely release first-quarter deliveries on Tuesday. Expectations are low for Tesla while Nio and especially Li Auto cut delivery targets in recent days.

Nvidia and META stock are on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. Nvidia, Meta Platforms and CrowdStrike stock are on the IBD 50 list.

PCE Inflation

While market trading is finished, the week’s news isn’t over. The Commerce Department will release the February PCE price index at 8:30 a.m. ET Friday, as part of the income and spending report. But investors won’t get a chance to respond until Dow Jones futures open Sunday evening, with the real test coming Monday.

The overall PCE price index is expected to rise 0.4% vs. January. PCE inflation is seen ticking up to 2.5% vs. a year earlier from January’s 2.4%. The core PCE price index, the Fed’s top inflation gauge, should advance 0.3% vs. January with a steady 2.8% gain vs. a year earlier.

Inflation has proved sticky in recent months, making the Federal Reserve less eager to cut.

Fed chief Jerome Powell will give a speech at 11:30 a.m. ET, though he may not discuss the current economy or monetary policy.

Meanwhile, personal income should advance 0.4% with personal spending up 0.5%.

The odds of a June Fed rate cuts were about 64% on Thursday.

Dow Jones Futures Today

Dow Jones futures little changed Thursday evening, along with S&P 500 futures and Nasdaq 100 futures.

Dow futures won’t reopen until 6 p.m. ET Sunday.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

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Stock Market Rally

The stock market rally saw modest-to-strong weekly gains outside of some growth plays.

The Dow Jones Industrial Average rose 0.8% in weekly stock market trading, setting a record close Thursday. The S&P 500 index gained 0.4%, just setting an intraday all-time high Thursday. The Nasdaq composite dipped 0.3%, just below peaks. For the quarter, the Dow gained 5.6%, the S&P 500 jumped 10.2% and the Nasdaq leapt 9.1%.

Market breadth was impressive during the week. The small-cap Russell 2000 jumped 2.5%, hitting a two-year high. The Invesco S&P 500 Equal Weight ETF (RSP) gained 1.6%, setting a record high. The First Trust Nasdaq 100 Equal Weighted Index ETF (QQEW) rose 0.4% vs. the Nasdaq 100’s 0.5% slide.

The 10-year Treasury yield fell 3 basis points to 4.19% for the week, dipping below the 200-day line.

U.S. crude oil futures climbed 3.15% to $83.15 a barrel last week, surging 16.1% in the first quarter.

ETFs

Among growth ETFs, the iShares Expanded Tech-Software Sector ETF (IGV) fell 0.8% for the week. Microsoft stock is a huge holding, with CrowdStrike also in IGV. The VanEck Vectors Semiconductor ETF (SMH) retreated 1.2%. But these were inside weeks, giving up just a portion of the prior week’s strong gains.

Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) climbed 1.3% last week and ARK Genomics ETF (ARKG) advanced 2.1%. Tesla stock is a major holding across Ark Invest’s ETFs.

The Industrial Select Sector SPDR Fund (XLI) edged up 0.6%, the Financial Select SPDR ETF (XLF) rose 1.7% and SPDR S&P Homebuilders ETF (XHB) climbed 1.2%, all to record highs.

SPDR S&P Metals &…