Dow Jones futures remained steady in after-hours trading, alongside flat S&P 500 and Nasdaq futures, as the market anticipates the upcoming Consumer Price Index (CPI) report for May.
Tuesday saw a modest uptick in the stock market, driven largely by Tesla’s recent buzz around autonomous taxi initiatives, while Alphabet (Google’s parent company) generated interest with a notable buy signal. Despite these highlights, many growth stocks displayed signs of weakness but managed to recover somewhat from earlier lows.
Chip stocks showcased notable strength, buoyed by optimism surrounding reduced export restrictions due to ongoing trade discussions with China. Additionally, strong sales figures from Taiwan Semiconductor (TSM) lent further support to the sector.
In after-hours trading, GameStop (GME) released its quarterly earnings, which presented mixed results. Following the release, the stock dipped after narrowly holding a recent buy point.
Dow futures slightly decreased in relation to expected fair value, while S&P 500 futures held steady, and Nasdaq 100 futures experienced slight gains. It’s important to recognize that after-hours trading doesn’t always reflect movements in the next regular market session.
Recent comments from Commerce Secretary Howard Lutnick indicated that U.S.-China trade negotiations in London are progressing positively, with a potential resolution looming. Meanwhile, discussions are reportedly moving forward between the U.S. and Mexico to roll back certain tariffs on steel imports, which prompted a decline in U.S. steel stock prices.
Later today, the Labor Department is set to unveil the May CPI data, with economists forecasting a 0.2% increase from April. They also expect annual inflation rates to rise to 2.5%, up from 2.3% the previous month, while core CPI, which excludes food and energy costs, is projected to increase by 0.3%.
The broader market showed some resilience, with the Dow Jones Industrial Average climbing by 0.25%, while the S&P 500 and Nasdaq composite gained 0.55% and 0.6%, respectively. Small-cap stocks were also in the green, closing 0.6% higher and nearing their 200-day moving average.
Encouragingly, the Invesco S&P 500 Equal Weight ETF gained 0.5%, indicating some positive breadth across the market beyond major players. In contrast, the Innovator IBD 50 ETF experienced a decline, reflecting broader struggles in growth stocks, despite some recovering from intraday lows.
Tesla’s stock saw significant movement, jumping 5.7% as it regained footing above key moving averages. The company teased an upcoming robotaxi launch, which is generating excitement among investors. However, data on EV registrations in China painted a more complicated picture, as second-quarter sales lag compared to the first quarter.
Google’s stock also climbed, buoyed by news that AI powerhouse OpenAI is partnering with Google Cloud for its data center needs—an unexpected development given the competitive landscape in search and advertising.
In summary, while the market shows signs of strength, particularly from heavyweight stocks, there are underlying challenges, especially for growth-oriented investments. Active investors are encouraged to remain vigilant, adjusting positions as necessary and maintaining a close eye on potential opportunities and exit strategies. Staying informed through daily updates and analyses can better align portfolios with current market dynamics.
