Yesterday, US stock indices ended lower. The S&P 500 decreased by 0.99%, the Nasdaq 100 fell by 1.57%, and the Dow Jones Industrial Average dropped by 0.93%.
During today's trading, futures for US stock indices rose following strong earnings reports from Amazon.com Inc. and Apple Inc., lifting market sentiment after yesterday's correction. Investors appear to have brushed aside concerns about inflation and the Fed's hawkish policy, focusing instead on the robust performance of major tech companies. Both Amazon and Apple's earnings exceeded expectations, demonstrating resilience in consumer demand and operational efficiency amid a challenging macroeconomic environment. S&P 500 futures rose by 0.6%, while Nasdaq 100 futures gained 1.1% after the base indices declined on Thursday due to weakness in tech stocks.
Apple's shares climbed at the end of trading as the company's revenue surpassed analysts' expectations and provided an optimistic forecast. Amazon's stock surged by 13% in pre-market trading following a report of the fastest growth in its cloud division in nearly three years.
Asian indices fell but remained near record highs. The Nikkei 225 jumped by 2.1%, reaching a new historic peak, while mainland China and Hong Kong indices dropped by more than 1%.
In other sectors, the markets demonstrated mixed dynamics: gold fell by 0.4%, marking its fourth decline in five sessions. Yields on Treasury bonds and the US dollar stabilized. The yen strengthened after rising inflation in Tokyo and a government statement indicating it is closely monitoring currency movements, feeling a heightened sense of priority.
Regarding other company news, Meta Platforms Inc. issued bonds totaling $30 billion, indicating that investors are ignoring concerns and continuing to bet on the rally, which has increased total market capitalization by $17 trillion since April. "None of this means that the AI bubble is going to burst and that we're on the cusp of a major reversal in the stock market," Miller Tabak stated. It is clear that the largest tech companies are betting on the future of AI based on massive data centers. The only takeaway that interests investors regarding the revenues of major tech companies is which company will be able to last the longest in the AI race.
As for the technical picture of the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,874. This will help the index gain ground and pave the way for a breakout to the new level of $6,896. An equally important objective for bulls will be maintaining control above $6,914, which would strengthen buyers' positions. In the event of a downward move driven by reduced risk appetite, buyers must assert themselves in the $6,854 area. A break below this level would quickly push the trading instrument back to $6,837 and open the path toward $6,819.
