Stock-index Futures Trading

by Warren Seah

U.S. stock index futures are showing signs of a possible decline after strong gains in the previous session, as Samsung Electronics issued a profit warning that has weighed on the technology sector.

S&P 500 Futures (ES00)

  • 0.3% decrease
  • 14-point dip to 4787

Dow Jones Industrial Average Futures (YM00)

  • 0.3% decrease
  • 121-point fall to 37812

Nasdaq 100 Futures (NQ00)

  • 0.4% decrease
  • 69-point easing to 16735

Market Performance on Monday

On Monday, the market saw positive performance with the following gains:

  • Dow Jones Industrial Average (DJIA):

    • A rise of 217 points (0.58%)
    • Closing at 37683
  • S&P 500 (SPX):

    • An increase of 66 points (1.41%)
    • Closing at 4764
  • Nasdaq Composite (COMP):

    • A gain of 320 points (2.2%)
    • Closing at 14844

Impact of Samsung Electronics’ Profit Warning

The technology sector is experiencing a slight setback following Samsung Electronics’ announcement that its fourth-quarter operating profit may drop by 35%. The decline can be attributed to weak consumer demand for smartphones, which has affected the sales of memory chips.

This news has disrupted Wall Street’s recent rally, which saw a bounce of 1.4% in the S&P 500 and a surge of 2.2% in the Nasdaq Composite on Monday. Notably, leading the charge were prominent technology stocks like Apple and Nvidia, with Apple seeing a rise of 2.4% and Nvidia jumping by 6.4%.

Factors Influencing the Market

The rally was reignited by the brief dip in the 10-year Treasury yield, falling below 4%. This development was well-received by investors, especially when coupled with the news that U.S. consumers’ one-year inflation expectations were at their lowest level since January 2021.

Market Update: U.S. Crude Oil Falls, Investors Look to Tech Shares

Investors welcomed the news of U.S. WTI crude oil falling towards the $70 a barrel mark, as they hope this retreat will alleviate inflationary pressures. Furthermore, falling Treasury yields have enticed investors to buy technology shares on the dip. Richard Hunter, head of markets at Interactive Investor, noted that technology giants like Alphabet, Amazon, and Microsoft have seen renewed buying interest amidst the ongoing debate surrounding interest rate cuts.

Inflation Update and Interest Rate Cut Speculation

A crucial update on inflation is expected to be released on Thursday with the consumer price index for December. The market is currently pricing in a 58% chance of the Federal Reserve implementing interest rate cuts at its March policy meeting, depending on inflation data.

Key Economic Updates

On Tuesday, U.S. economic updates include the release of November’s trade deficit at 8:30 a.m. Eastern time. Additionally, Michael Barr, the Fed’s Vice Chair for Supervision, will partake in a discussion at noon.

Asian Market Highlights

In Asia, Japan’s Nikkei 225 index rose by 1.2%, reaching its highest level since March 1990. In contrast, Hong Kong’s Hang Seng initially rose but later closed down 0.2% to its lowest level since October 2022. Concerns about China’s economy continue to persist.

Overall, market sentiment remains influenced by developments in the oil industry, tech sector, and inflation projections.

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