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Traders work on the New York Stock Exchange on February 1, 2024.
Brendan Mcdermid | Reuters
S&P 500 futures rose Friday morning as a trio of mega-cap tech titans reported results and investors awaited the January jobs report.
Futures tied to the broader market index rose about 0.5%, while Nasdaq 100 futures rose 1%. On the other hand, Dow Jones Industrial Average futures remained near the flat line.
In extended trading, Meta shares rose 15% after the social media giant defied analyst expectations. Facebook’s parent company also announced it will pay a quarterly dividend for the first time and authorized a $50 billion share buyback program. Amazon shares rose 7% compared to the fourth quarter. However, Apple fell 3% after the company reported a drop in sales in China during the fiscal first quarter.
The moves follow a day of bounces during the trading session on Thursday. The Dow Jones Industrial Average added 0.97%, while the S&P 500 and Nasdaq Composite gained 1.25% and 1.3% respectively. The move follows a sell-off on Wednesday that began after Federal Reserve Chair Jerome Powell indicated a rate cut was unlikely at the March meeting.
Thursday’s move higher indicates that investors are not only correcting Wednesday’s overreaction but are ultimately optimistic about rate cut prospects, said Art Hogan, chief market strategist at B. Riley Wealth Management.
“This is the first time (the FOMC) is actually talking about rate cuts,” he told CNBC. “There’s still an incredible chance that with seven more weeks of data, by the time the March meeting comes around, they could feel confident enough to push through their first rate cut. It’s not our base case, but it’s certainly in the cards, and there is “There is a 60% chance they will do it in May.”
Meanwhile, better-than-expected results across the board have also justified the market’s constructive reaction. Ultimately, Hogan believes this year’s market rally is likely to continue, and that Wednesday’s pullback will remain a blip on the radar.
“There is a resilient economy, a confident consumer, better-than-forecast economic data and the potential for earnings and revenue growth in 2024, which is likely to drive markets a little higher,” he said.
Investors (and the Federal Reserve) will have another piece of data to ponder on Friday with the release of the January jobs report. Economists surveyed by Dow Jones call for payrolls to have increased by 185,000 jobs and for the unemployment rate to inch higher to 3.8%. That compares to December’s explosion of 216,000 jobs added and an unemployment rate of 3.7%.
Chevron, Exxon Mobil, Bristol-Myers Squibb, Cigna and AbbVie are due to report results before Friday.