U.S. stock index futures stabilized during evening trading on Thursday, as Wall Street grappled with profit-taking following indications of cooling inflation, while investors geared up for the upcoming second quarter earnings season.
As of 7:03 PM ET (11:03 PM GMT), S&P 500 Futures held firm at 5,641.50 points, with Nasdaq 100 Futures unchanged at 20,444.25 points. Dow Jones Futures edged slightly higher to 40,123.0 points.
The softening Consumer Price Index (CPI) data for June has bolstered expectations of a September interest rate cut by the Federal Reserve. Headline CPI rose 3% year-on-year, below expectations, while core CPI grew by 3.3%, also falling short of forecasts. This prompted traders to increase the probability of a 25 basis points rate cut in September to over 85%, up significantly from 65% a day earlier, according to CME Fedwatch.
Despite optimism over potential rate cuts, Wall Street saw a retreat from recent record highs on Thursday, largely driven by substantial losses in technology stocks. The pullback came as investors cashed in profits from the sector’s recent gains, fueled by enthusiasm around artificial intelligence.
Market standout NVIDIA Corporation saw a 0.8% decline in after-hours trading following a 5.6% drop during the regular session. Tesla Inc also fell 2% in after-hours trading, compounding an 8.5% decline earlier in the day, triggered by news of a delay in the company’s autonomous taxi launch.
The technology sector, which had been instrumental in driving recent market rallies, weighed heavily on Thursday’s trading session. The S&P 500 closed down 0.9% at 5,584.54 points, while the NASDAQ Composite slid 1.9% to 18,288.62 points. The Dow Jones Industrial Average managed a modest gain of 0.1% to finish at 39,753.75 points.
Analysts will closely monitor these earnings reports for insights into the impact of high interest rates and persistent inflation on corporate performance, amid signs of economic cooling in the second quarter.
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