Stock market today: Stock futures edge higher after biggest wipeout for Dow

US stock futures turned higher Friday as Wall Street looked to bounce back from the Dow’s biggest wipeout in over a year.

Futures tied to the S&P 500 (^GSPC) pointed up about 0.3%, while the tech-heavy Nasdaq Composite (^IXIC) rose around the same amount. The blue-chip Dow Jones Industrial Average (^DJI) put on around 0.2%.

Renewed interest rate concerns fueled Thursday’s rout, led by the Dow’s more than 600-point decline. Meanwhile, US Treasury yields pushed back up, with the benchmark 10-year yield (^TNX) hovering closer to 4.5%.

A roaring mood turned sour after stronger-than-expected US business data prompted a rethink on the Federal Reserve’s path on interest rates.

Traders are about evenly split on whether the central bank will slash rates at its September meeting, according to the CME FedWatch tool. That marks a significant shift from a few days ago, when only around one-third expected the Fed to hold steady through the fall’s first meeting. Goldman Sachs on Friday said it no longer expects the Fed to make its first cut in July, instead suggesting September was most likely.

But Wall Street could into the holiday weekend in better spirits. Nvidia (NVDA), whose latest blowout quarter spurred an early rally Thursday, was up another 1% early Friday to hover around $1,050 per share. Its coming stock split could fuel even more retail interest in its stock.

Highlighting the macroeconomic front Friday is a revised look at the University of Michigan’s consumer sentiment index for May. An earlier reading showed the index plunged this month, as inflation and interest rate concerns bit into Americans’ views of the economy.

Live1 update

Fri, May 24, 2024 at 8:25 AM EDT
Where the minds of investors are…
Some interesting insights into the psyche of investors out of the JP Morgan team this morning.
Their new survey of 850 investors found:
The asset class with the highest returns in 2024 is expected to be stocks (51%), with a majority holding a slightly bullish view on the S&P 500, expecting the index to be at 5,250-5,750 (55%) at year-end.
The majority agreed that the next move from the Federal Reserve will be a rate cut (69%), expected at the September meeting (49%).
The biggest threat to markets this year was geopolitical turmoil (cited by 35%) and resurgent inflation (32%).
On the topic of US presidential elections, investors were almost evenly split between whether the Republican (51%) or Democratic (49%) candidate would win.
30% of respondents expected a Republican win would lead to a risk-on environment for markets.
27% thought a Republican win would have no material market impact.
21% expected a Democratic win would cause no material market impact.

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Where the minds of investors are…

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