Dow Jones Futures: Market Rally Set To Rebound With Inflation Data Due; 5 Earnings Winners

Dow Jones futures rose early Friday, along with S&P 500 futures and Nasdaq futures, as the stock market rally looks to rebound after Thursday’s downside reversal. The Bank of Japan made a key policy change, and the Fed’s favorite inflation gauge is set for early release.


The major indexes gave up solid early gains Thursday, but the actual closing losses were modest. The Dow Jones snapped a 13-day win streak.

First Solar (FSLR), Intel (INTC) and Roku (ROKU) were strong earnings winners in the premarket, along with solid gains from KLA (KLAC) and DexCom (DXCM). Oil majors Exxon Mobil (XOM) and Chevron (CVX) also reported.

The “Magnificent Seven” stocks of Apple (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOGL), (AMZN), Nvidia (NVDA), Meta Platforms (META) and Tesla (TSLA) all showed slight-to-modest gains early Friday.

Meanwhile, Biogen (BIIB) will buy Reata Pharmaceuticals (RETA) for $172.50 per share in cash, or an enterprise value of $7.3 billion. BIIB stock fell modestly while RETA stock skyrocketed more than 50%.

META stock, Nvidia and Tesla are on IBD Leaderboard. Microsoft stock is on the IBD Long-Term Leaders list. TSLA stock is on the IBD Big Cap 20.

Dow Jones Futures Today

Dow Jones futures rose 0.5% vs. fair value, with Intel and CVX stock both Dow components. S&P 500 futures climbed 0.7%. Nasdaq 100 futures popped 1.1%, with chips and megacaps leading the way.

The 10-year Treasury yield fell 6 basis points to 3.95%. It’s possible that some of Thursday’s spike came amid buzz that the BoJ would make a policy shift.

Crude oil prices were little changed. Copper futures climbed 1%.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Bank Of Japan Policy Tweak

The Bank of Japan, in Gov. Kazuo Ueda’s first big move since taking over, kept its official target for 10-year Japanese government bonds around 0% but now says its 0.5% ceiling is a guideline, not a hard limit. The bank also said it will offer to buy 10-year debt at 1%, effectively doubling the range.

Japanese 10-year yields jumped to their highest in nine years.

Fed’s Inflation Gauge

The Commerce Department will release June’s PCE price index as part of the income and spending report at 8:30 a.m. ET. The PCE inflation rate is expected to cool to 3% from May’s 3.8%. The core PCE inflation rate should slow to 4.2% from May’s 4.6%.

Keep an eye out for service prices excluding energy and housing. Fed chief Jerome Powell has said he’s focusing on this supercore inflation reading.

Personal income and consumer spending should both rise 0.4% vs. May.

Meanwhile, the Labor Department will release the employment cost indexes at the same time. The ECI, the broadest measure of labor income, should show a still-hefty 1.1% second-quarter gain vs. Q1, when it rose 1.2%.

Key Earnings

FSLR stock jumped after First Solar earnings and guidance topped views. The solar leader is set to flash multiple early buy signals at the open.

INTC stock popped after Intel reported a surprise profit and gave an upbeat outlook.

Roku stock leapt after the streaming web giant slashed its loss while Roku revenue and user growth topped.

KLA rose modestly on its own beat-and-raise report. KLAC stock jumped 5.35% on Thursday after rival Lam Research (LRCX) reported strong results. KLA could offer a buying opportunity Friday.

DexCom signaled a move above the top of a buy zone after reporting Q2 EPS doubled. The diabetes products maker also raised revenue guidance.

Exxon Mobil missed on EPS but beat on revenue. XOM stock edged higher.

Chevron reported full Q2 results after reporting some preliminary figures, including earnings per share, on Sunday. Revenue came in lighter than expected. CVX stock was essentially flat.

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Stock Market Rally

The Dow Jones Industrial Average declined 0.7% in Thursday’s stock market trading. The S&P 500 index lost 0.6% and the Nasdaq composite retreated 0.55%. The small-cap Russell 2000 gave up 1.3%.

The Nasdaq ended the session at 4.2% above its 50-day line, the first time it’s closed below 5% since May 25.

The market rally had started Thursday strong, especially the Nasdaq, as Meta Platforms (META) and chip stocks soared. But Meta and chip stocks pared gains, while software reversed lower, led by ServiceNow (NOW) and Microsoft (MSFT).

The 10-year Treasury yield surged 16 basis points to 4.01%. Crude oil prices climbed 1.7% to $80.09 a barrel, topping $80 for the first time since April.

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Magnificent Seven Stocks

Apple stock rose 0.9% early Friday. On Thursday, AAPL stock reversed lower for a slim 0.7% decline to 193.22. Apple reports earnings on Aug. 3.

Microsoft stock edged up 0.8% early Friday. MSFT stock fell 2.1% to 330.72 on Thursday, closing below its 50-day line for the first time since March 1. That followed Wednesday’s 3.8% retreat following disappointing guidance.

Google stock climbed 1.2% before the open. Shares on Thursday edged up 0.1% to 129.40, giving up a modest gain. GOOGL stock is still in range from a 127.10 cup-with-handle buy point after jumping 5.8% Wednesday on strong earnings.

Amazon stock advanced 1.4%, bouncing from near the 50-day line. Shares tried to do so early Thursday, but faded to close up 0.1% at 128.25.

Nvidia stock gained 1.6% in premarket trade. Shares rose 1% to 459 on Thursday, though off session highs.

Meta stock climbed 1.3%. Shares leapt as much as 9% on Thursday, but faded to close with a 4.4% gain to 311.71.

Tesla stock was up 1.3%. Shares fell 3.3% to 255.71 on Thursday. TSLA stock is working on a possible handle to a consolidation going back to September.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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