Live Stock Market News Updates: May 26, 2022

Latest / May 26, 2022 / DRPhillF / 0

US stock futures advanced in pre-market trading on Thursday as markets tried to come back from a sharp sell-off in stocks following disappointing expectations from some major companies.

Futures linked to the S&P 500 Index are up 0.5%, and contracts on the Dow Jones Industrial Average are up 160 points, or 0.5%. Nasdaq futures also rose 0.3% as the index regained losses from recent pressures in the technology sector.

The moves are followed by a short delay in stocks that closed higher on Wednesday but continue to trend downward despite a series of daily fluctuations. In the first 99 trading days of the year from Wednesday’s close, the S&P 500 fell 17.3%, marking its fourth worst start to a year in history, according to data from Compound Capital Advisors.

Macy’s (M) shares rose nearly 15% before opening after the retail giant raised its earnings forecast in a bullish surprise to investors weighing a slew of bearish forecast revisions from their peers. Meanwhile, Nvidia Corp. (NVDA) chip maker to the growing list of companies reporting a weaker second-quarter outlook and hinting of economic constraints ahead. The company’s stock fell in extended trading Wednesday despite reporting outperforming earnings after Nvidia warned that revenue for the current quarter is likely to fall by $500 million due to headwinds from the Russian war in Ukraine and the COVID shutdown in China. A similar change in outlook from software peer Snowflake (SNOW) sent the company’s shares down 14% in extended trading.

Recent trading sessions have seen sharp declines in some big-name stocks after earnings reports confirmed investors’ concerns about the impact of inflation on corporate margins. Earlier this week, Snap Inc. The social media giant (SNAP) dropped 43% in its biggest one-day drop ever, spurring other digital-ad-reliant stocks sell-off that pushed the Nasdaq to its lowest close since November 2020.

Last week, the downturn in retail occurred after Walmart (WMT) and Target (TGT) launched the latest trend of significant declines in individual names after weaker earnings expectations. According to data from FactSet, S&P 500 companies reporting first-quarter results experienced the largest negative price reaction to positive earnings per share surprises since 2011.

“Whether it’s today or tomorrow, it looks like we’re starting to digest what appears to be a significant amount of bad news,” Seth Wonder, Acorns chief investment officer, told Yahoo Finance Live on Wednesday. “The main thing is to have the data that takes some of the pressure off the Fed.”

A rebound in disappointing guidance has kept Wall Street on the alert for signs that central bank plans to raise interest rates will be effective in returning prices to healthier levels. Minutes released on Wednesday from the Federal Reserve’s policy-setting meeting in May indicated that a majority of officials are firmly committed to raising interest rates by 50 basis points at each of the next two meetings in June and July. So far this year, policy makers have raised short-term borrowing costs by 50 basis points earlier this month and 25 basis points in April.

“Despite the concerns of market participants with this situation, it is worth noting that the Fed has over $100 billion of outstanding securities on its balance sheet, so the resulting asset purchases could help negate growth concerns this summer.” Comerica Wealth Management Chief Investment Officer John Lynch said in an email note. “It really is an ideal time for the Fed to come up strong and send a message to the markets that they are serious about inflation without pushing growth into a meltdown.”

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8:58AM ET: US jobless claims are down after rising unexpectedly last week

Unemployment insurance claims fell in the latest weekly data, underlining continued strength in the labor market despite rising inflation and fears of an economic slowdown.

The Labor Department’s latest weekly jobless claims report showed that 210,000 claims were filed in the week ending May 21, less than the forecast of 215,000 economists polled by Bloomberg. Last week, deposits unexpectedly rose to 218,000, the highest level since January.

Weekly claims continued to hover near multi-decade lows. However, several retailers, including Walmart Inc. (WMT), recently cut their forecasts and warned that inflation is likely to affect earnings, prompting market participants’ fears of possible layoffs.

“Large retailers are reporting margin pressure and weak consumer demand as inflation erodes discretionary purchasing power and consumers redirect spending from goods to services,” Comerica chief economist Bill Adams said in a recent note. This will slow job growth in the retail and e-commerce sectors for the rest of 2022.”

“A stock market sell-off could dampen business sentiment and make some companies more cautious about hiring, especially businesses that have negative cash flow and depend on investor money to fund operations like many startups,” he added.

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7:22 a.m. ET: Futures jump as indices return from selling

Here is where the stock futures were in pre-market trading on Thursday:

S&P 500 futures contracts (ES = F.): +15.75 (+0.40%) to 3,992.50
Dow futures contractsYM = F.): +134.00 (+0.42%) to 32210.00
Nasdaq futures contractsNQ = F.): +20.00 (+ 17.00%) to 11962.25
raw (CL = F.): + $0.88 (+0.80%) to $111.21
He went (GC = F.):- $2.60 (-0.14%) to $1,843.70 per ounce
Treasury for 10 years (^ degeneration): -1.1 basis points to produce 2.7490%