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US Stock Futures Fall After Tuesday Rally, But History Favors Bulls: Markets Rose 9 Of Last 10 Mays, Says Expert
U.S. stock futures declined Wednesday morning, even as major indexes closed higher on Tuesday, with the S&P 500 and Dow Jones logging their sixth consecutive day of gains — marking their longest winning streak in months.
Easing of the auto tariffs helped the markets with a fresh dose of optimism going into a jam-packed earnings week, with several heavy-hitters, including 4 of the “Magnificent 7” companies, set to release their quarterly results over this week.
On Tuesday, President Donald Trump hinted that trade negotiations with India were “coming along great,” and that the administration was close to announcing a deal, further adding to the optimism, according to a report by CNBC.
Investors on Wednesday will be closely watching the earnings of tech giants, Microsoft Corp. (NASDAQ:MSFT), Meta Platforms Inc. (NASDAQ:META), Qualcomm Inc. (NASDAQ:QCOM), and KLA Corp. (NASDAQ:KLAC), which should set the tone for the rest of this week.
U.S. 10-Year Treasuries are at 4.16%, while the 2-Year Treasuries are at 3.66%. The CME Group's FedWatch tool shows the markets pricing a 92.4% likelihood of interest rates remaining unchanged during the FOMC meeting that is scheduled to take place the first week of May, which marks an increase from 91.1% on Tuesday.
| Futures | Change (+/-) |
| Dow Jones | 0.09% |
| S&P 500 | -0.05% |
| Nasdaq 100 | -0.15% |
| Russell 2000 | 0.16% |
The SPDR S&P 500 Trust ETF (NYSE:SPY) was up 0.63% on Monday, while the Invesco QQQ Trust (NASDAQ:QQQ), which tracks the Nasdaq-100 Index, was up 0.66%, according to Benzinga Pro data.
Cues From Last Session:
Almost all S&P 500 sectors closed in the green on Tuesday, barring the energy sector, which was down 0.29%. The index was up 0.58%, marking its sixth-straight winning day, the longest streak since November of 2024. The Dow Jones was up 0.75%, and the Nasdaq Composite by 0.55%.
Visa Inc. (NYSE:V), Coca-Cola Co. (NYSE:KO), and Pfizer Inc. (NYSE:PFE) reported strong earnings, while Starbucks Corp. (NASDAQ:SBUX) fell short of estimates during its second quarter results on Tuesday.
Economic data was disappointing, with the S&P Case-Shiller Home Price Index (20 Cities) up 4.5%, below estimates at 4.8%, followed by Consumer Confidence at 86.0, below the median forecast at 87.3, and finally, the Total Job Openings for March came in at 7.3 million, below the forecast at 7.5 million.
As of Tuesday, the Nasdaq 100 index was down 12.04% from its previous high of 22,222.61 points. The S&P 500 index was 9.54% lower, as compared to the last record high of 6,147.43 points. On the other hand, Dow Jones was 10.08% down from its 52-week high of 45,073.63 points.
The Dow Jones index jumped 300 points or 0.75% to 40,527.62, whereas the S&P 500 index surged 0.58% to 5,560.83. Nasdaq Composite ended 0.55% higher at 17,461.32, and the small-cap gauge, Russell 2000, also advanced 0.56% to 1,976.52.
| Index | Performance (+/-) | Value |
| Nasdaq Composite | 0.55% | 17,461.32 |
| S&P 500 | 0.58% | 5,560.83 |
| Dow Jones | 0.75% | 40,527.62 |
| Russell 2000 | 0.56% | 1,976.52 |
Insights From Analysts:
Chartered Market Technician, Ryan Detrick, says that the markets have ended up higher in May for 9 of the past 10 years, posting a graphic on X to illustrate his point.
See Also: American Express Says the Rich Are Still Dining Out and Living Large — While Everyone Else Braces for Recession, Tariffs, and Skyrocketing Prices
The average returns in May over the past 10 years stand at 0.9%, with a median of 1.1%. However, it is worth noting that this is a relatively new phenomenon. A few years ago, “Sell In May & Go Away” was a popular adage in the markets, since the markets were known to underperform in the Summer months.
Upcoming Economic Data:
Here’s what investors will be watching on Wednesday,
- The ADP Employment figures are set to be released by 8:15 AM ET.
- The first quarter GDP data, along with the Employment Cost Index at 8:30 AM ET.
- Chicago Business Barometer (PMI) for April, which is scheduled to be unveiled by 9:45 AM ET.
- Consumer Spending, PCE Index, Core PCE Index, and Pending Home Sales, all scheduled for 10:00 AM ET on Tuesday morning.
Stocks In Focus:
- Microsoft Corp. (NASDAQ:MSFT) is up 0.19% pre-market, as investors await the tech giant’s quarterly results after markets close on Wednesday evening. Analysts expect $3.22 per share in earnings, on $68.4 billion in revenue.
- Meta Platforms Inc. (NASDAQ:META) is down 0.50% in pre-market trade, as investors wait for its quarterly results, scheduled to be announced after markets close. Analysts expect $5.21 per share, on $41.4 billion in revenue.
- Qualcomm Inc. (NASDAQ:QCOM) is trading up 0.84% pre-market, ahead of its second quarter results scheduled for after markets close. Earnings are expected at $2.82 per share, on $10.7 billion in revenue.
- KLA Corp. (NASDAQ:KLAC) is down 0.16% pre-market, with the company set to release its quarterly results after markets close. Consensus estimates peg earnings at $8.08 per share, on $3.01 billion in revenue.
- Caterpillar Inc. (NYSE:CAT) is rather flat pre-market, down just 0.02% at the time of writing this. The company is expected to release its quarterly results on Wednesday morning, before markets open, with analysts expecting $4.35 per share in earnings, on $14.6 billion in revenue.
Commodities, Gold, And Global Equity Markets:
Crude oil futures remain on their losing streak, down 0.91% in the early New York session, dipping below the key support level of $60, currently trading at $59.85 a barrel.
Gold Spot US Dollar is down yet again, by 1.14%, hovering around 3,285.48 per ounce, down from its record high of $3,500.33 per ounce last week. The U.S. Dollar Index is up 0.16%, trading at the 99.3969 level.
Asian markets rose on Wednesday, with Japan's Nikkei, India's Nifty 50, China's Shenzhen, and Australia's ASX 200 posting gains. South Korea's Kospi finished flat with a slight dip, while New Zealand's NZX 50 closed lower.
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