Nasdaq Futures Spike As Meta, Microsoft Earnings Outweigh Hawkish Fed — Strategist Warns Of Potential ‘Summer Swoon’

Big tech earnings have inspired a substantial rise in Nasdaq futures in overnight trading after the Federal Reserve, led by Jerome Powell, failed to provide a thrust to the market in Wednesday’s session.

Meta Platforms, Inc. (META) stock was up nearly 12% in overnight trading and Microsoft (MSFT) stock gained over 8%, after their quarterly beats and optimistic forward projections.

The market may also be savoring the Trump tariff deals trickling in ahead of the Aug. 1 deadline.

As of 10:50 p.m. ET on Wednesday, the Nasdaq 100 futures climbed nearly 1.30% and the S&P 500 futures rose about 0.90%. The Dow futures were up a more modest 0.25%, while the Russell 2000 futures fell 0.45%.

On Wednesday, the major averages closed on a mixed note as traders were left unimpressed with the Fed decision and Chair Powell’s comments at the press conference that followed the meeting. As expected, two Federal Open Market Committee (FOMC) members dissented, but there was no consensus signal toward a September cut. 

Economic data, including the ADP private payrolls report and GDP, released ahead of the Fed decision, came in better than expected, casting doubt on the rationale for rate cut calls. 

Eight of the 11 S&P 500 sector classes came under selling pressure, led by material, real estate, energy, and consumer staples, while IT, communication services, and utility stocks bucked the downtrend.

The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, edged up 0.13%, while the SPDR S&P 500 ETF (SPY) slipped 0.13%. The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the iShares Russell 2000 ETF (IWM) fell 0.39% and 0.51%, respectively. 

On Thursday, the market will likely look ahead to the initial jobless claims report (8:30 a.m. ET), and the June personal income and spending report (8:30 a.m. ET). The Fed’s favorite inflation gauge — the price consumption expenditure index — is part of the latter report.

A regional manufacturing gauge and the Bureau of Labor Statistics’ second-quarter employment cost index data are also due for the day.

AbbVie (ABBV), Bristol-Myers Squibb (BMY), CVS Health (CVS), Mastercard (MA), Sirius XM (SIRI), Sanofi (SNY), Amazon (AMZN), Apple (AAPL), Coinbase Global (COIN), BJ Restaurants (BJRI), Strategy (MSTR), KLA Corp. (KLAC), Paramount Global (PARA) and Roku (ROKU) are among the notable names reporting on Thursday.

LPL Chief Technical Strategist Adam Turnquist cautioned regarding a potential downside in the near term, although he remained positive about the longer term.

In a note to clients, the strategist said, “While it is hard to argue with a market making new highs, weak seasonal trends going into August and the end of a six-day record-high winning streak point to some potential near-term turbulence.”

“The longer-term technical backdrop remains constructive and supportive of buying the dip,” he said, adding that breadth was moving in the right direction with cyclical leadership intact.

He flagged the S&P 500’s 20-day moving average (dma), 6,200 (intraday lows), and 6,144 (February high) as supports, if a summer swoon unfolds.

The crude oil rally stalled as oil traded flat with a slight negative bias below the $70 mark in Asian trading, and gold futures fell modestly.

The 10-year Treasury note yield, which climbed on Wednesday on the back of strong data and the Fed decision, has pulled back slightly.

The U.S. dollar is weaker against most major currencies.

Most Asian markets retreated, reacting to the U.S. Fed decision, while the Japanese market advanced ahead of the Bank of Japan’s monetary policy announcement.

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