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Nasdaq, S&P Futures Flatline As Key Inflation Data, More Earnings Lie In Store This Week: Analyst Flags ‘Some Caution’ On Overvaluations

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U.S. stock futures once again displayed indecision on Monday, echoing recent sessions and reflecting market uncertainties. With no major earnings reports expected in the morning, attention is likely to turn to Federal Reserve officials’ speeches scheduled for the day and the New York Fed’s January consumer expectations reading. Bond yields remained stagnant above the 4% mark, while oil prices retraced after last week’s surge.

Cues From Last Week’s Trading:

Positive tech earnings overshadowed concerns about rate uncertainty, leading to a week of gains across the board. Despite hawkish comments from Fed officials, traders remained focused on upbeat earnings and a rally in crude oil, buoying energy stocks and lifting market sentiment.

As a result, major indices extended their winning streak for a fifth consecutive week. The Nasdaq Composite Index closed at its highest level since Nov. 19, 2021, while the Nasdaq 100 Index set a new closing record. The S&P 500 breached the 5,000 level for the first time, driven by optimistic fundamentals and better-than-expected earnings.

Although the 30-stock Dow Industrials closed slightly below its record high on Friday, broader participation was evident as the Russell 2,000 Index surpassed the psychological resistance of 2,000 for the first time since early January.

US Index Performance In Week Ended Feb. 9

Index Performance (+/-) Value
Nasdaq Composite +2.31% 15,990.66
S&P 500 Index +0.06% 5,026.61
Dow Industrials +1.37% 38,726.33
Russell 2000 +2.41% 2,009.99

Analyst Color:

Analysts and economists are optimistic about the strong performance of the market this year. LPL Chief Economist Jeffrey Roach attributed the recent market buoyancy to the expectations that artificial intelligence will boost productivity and help strong economic performance.

“This year should be another good year despite the risks of some choppiness in the near term as investors wait for that first cut from the Fed,” he said.

Rob Swanke, Senior Equity Strategist at Commonwealth Financial Network, sounded a note of caution. “Some caution is warranted with valuations continuing to climb above 20x forward earnings and getting closer to the peak of 21.4x we saw when the S&P 500 was at 4,800 at the beginning of 2022,” the…

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