Investors find themselves in a state of contemplation as the postelection rally shows signs of wavering. S&P 500 futures are near flat on Thursday night, with futures tied to the Dow Jones Industrial Average losing 25 points or 0.1%. S&P 500 futures also slipped 0.1%, and Nasdaq 100 futures shed 0.2%. In extended trading, Applied Materials saw a significant slide of more than 5% after posting weak guidance for revenue in the current quarter. On the other hand, Domino’s Pizza jumped more than 7% following Berkshire Hathaway’s announcement of a new stake in the pizza chain. This comes after a losing day on Wall Street where the postelection upswing began to fizzle. The Dow fell more than 200 points during the session, while the S&P 500 and Nasdaq Composite each slipped about 0.6%. Stocks took a downturn in afternoon trading after Federal Reserve Chairman Jerome Powell stated during an event in Dallas that the central bank wasn’t “in a hurry” to cut interest rates, following the Fed’s cut in borrowing costs last week. The three major indexes are on track to end the week lower, giving up some of the gains seen during last week’s climb on the back of Donald Trump’s victory in the presidential election. The Nasdaq Composite has dropped 0.9% this week, while the S&P 500 and Dow have shed 0.8% and 0.5% respectively. “Investors are catching their breath and evaluating whether the advance has merit,” said Sam Stovall, chief investment strategist at CFRA Research. “We really don’t see anything on the horizon right now to upend stocks, but investors are always looking around to see what could cause the trend to end.”Investors’ Evaluation and Market Outlook
Investors are currently in a state of cautious evaluation. The postelection rally, which initially showed great promise, is now facing uncertainties. The movements in futures markets, such as the near flatness of S&P 500 futures and the losses in Dow and Nasdaq futures, indicate the market’s indecision. Applied Materials’ slide and Domino’s Pizza’s jump highlight the diverse reactions within the market. The Fed’s stance on interest rates also plays a crucial role in shaping investor sentiment. As the week comes to a close, investors will be closely watching economic data on retail sales, import prices, and industrial production. These data releases will provide valuable insights into the health of the economy and may influence future market directions.BlackRock’s Perspective on Fed Rate Cuts
BlackRock bond king Rick Rieder believes that the Federal Reserve should cut rates at least one more time in December before evaluating its path. The current federal funds rate is between 4.5% to 4.75%, which Rieder deems restrictive for most potential borrowers and homebuyers. He suggests that reducing the rate by another quarter-percentage point in December would bring it closer to 4%. “Once you get that rate there, then you can sit back and say okay, what do we need to do from this point going forward?” Rieder said on CNBC’s “Closing Bell” on Thursday afternoon. “I still think they would like to get at least a couple of cuts done into next year, but the pace at which that happens and whether they actually need it gets really called into question.”Stocks in Extended Trading
After the bell, several stocks showed significant movements. Domino’s Pizza shares surged more than 7% after Berkshire Hathaway’s new stake announcement. Applied Materials, the semiconductor equipment manufacturer, slid more than 5% due to a weaker-than-anticipated revenue outlook for the current quarter. Palantir Technologies added nearly 4% after announcing its transfer of stock exchange listing from the New York Stock Exchange to the Nasdaq. These stock movements reflect the diverse activities and trends in the market during extended trading hours.Market Indicators and Closing Thoughts
Dow and S&P 500 futures were little changed shortly after 6 p.m. ET, both slipping around 0.1%. Nasdaq 100 futures ticked lower by 0.2%. As the trading week comes to an end, the three major indexes are on track to end in the red. The Nasdaq Composite has led the way down with a 0.9% decline this week. The S&P 500 and Dow have shed 0.8% and 0.5% respectively. Investors will continue to monitor market developments and economic data in the coming days to gain a better understanding of the market’s future direction. The current situation calls for careful analysis and a patient approach as the market navigates through these uncertain times.
