ZS - Nasdaq S&P 500 Futures Signal Uncertainty Before Crucial Inflation Data While Bitcoin Rallies On: Why This Analyst Models Solid Gains This Year | Benzinga

The cautious sentiment prevailing throughout the week persisted on Thursday, with U.S. stock futures indicating a mostly lower open as traders anxiously await the Federal Reserve’s favored inflation gauge. If the reading proves milder than anticipated, pent-up demand from sidelined traders could propel stocks sharply higher, but a hotter-than-expected inflation figure may trigger further selling. Rising bond yields and a firmer dollar reflect apprehensions about the inflation data.

Market participants will also hear from numerous Fed officials before the “blackout” period begins on March 9. While tech earnings have generally impressed, there have been some disappointments from other sectors. The ongoing crypto rally underscores the prevailing risk-on sentiment.

Cues From Last Trading Session

Wednesday’s session saw U.S. stocks close lower as investors digested revised fourth-quarter GDP data and its inflation components. All major indices opened lower and remained below the unchanged line throughout the session, closing in negative territory.

Recent weakness has pulled the S&P 500 and Dow Industrials off their record highs, with the latter declining for three consecutive sessions. Small-cap stocks reversed course and underperformed larger counterparts, with the Russell 2000 Index ending down 0.77%.

Communication services, IT, and healthcare sectors bore the brunt of the downturn, while real estate stocks surged.

Fund manager Louis Navellier said, “We’re seeing primarily a minor tech correction, with the Magnificent 7 the weakest, the pullback on the sectors which have had the strongest YTD performance, a rational move.”

An analyst shrugged off the current lackluster phase and pointed to data that offers hope for the remainder of the year. Carson Group’s Ryan Detrick shared a chart that showed in the fourth year of a new president, the market performed well in the second half of the year. The average gain for these years is 12.2%, the chart showed.