U.S. stock futures were mixed on Thursday morning of ahead of key inflation data expected later in the day that is expected to show price increases rising at their fastest annual pace since the early 1980s.
Dow Jones Industrial Average futures rose 77 points, or 0.2%, largely on the back of Disney. S&P 500 futures were flat and Nasdaq 100 futures fell less than 0.1%.
Shares of Dow 30 component Disney jumped nearly 8% in premarket trading after the company reported a quarterly earnings beat and a doubling of revenue from its parks, experiences and consumer products division. Uber gained 5.75% in extended trading after reporting a revenue beat and a bounce back from omicron-induced challenges.
Elsewhere, Twitter shares also rose premarket, jumping 4% after the company announced a $4 billion stock buyback program. Coca-Cola shares were up nearly 2% after the soft drink giant reported earnings and revenue that beat Wall Street estimates.
Investors were preparing for Thursday’s Consumer Price Index report, which is expected to show headline inflation for January at the highest level since 1982. Headline inflation including food and energy costs is expected to rise by 0.4%, or 7.2% year-over-year.
Economists will be watching to see whether the monthly gain shows that the pace of price increases could be ready to turn a corner.
“You’d be hard pressed to find anybody that doesn’t believe the CPI number’s going to be hot, because we seem to be playing a game of leapfrog, with everyone trying to get more hawkish about what the Fed may or may not do and monetary policy in 2022. That tends to set us up for a continuation of the rally,” said Art Hogan, chief market strategist at National Securities.
In trading Wednesday, Nasdaq Composite jumped for a second day as tech shares led the market higher and helped it recover some losses from the January sell-off, which was also led by tech names. The Nasdaq jumped 2.08% and the S&P 500 gained 1.5%, while the Dow Jones Industrial Average rose 305.28 points, or 0.86%.
Early pandemic winners of 2022, including Shopify and Etsy, as well as stay-at-home stocks like DocuSign and Zoom, were some of the biggest winners Wednesday.
“The market seems to have found a more constructive tone in the tug of war between trepidation over the Fed and the better fundamentals that we’ve seen in both earnings and the economic data,” Hogan said. “Having Disney do better than Netflix after its earnings report certainly seems to be a positive.”
Last month Netflix reported disappointing quarterly earnings, which added to investors skittishness towards tech stocks and the volatility in trading that followed.
Yung-Yu Ma, chief investment strategist at BMO Wealth Management, said that the strong January jobs report last week eased concerns about the Fed tightening coinciding with a weakening economy, taking the pressure off of the CPI report.
“I think the jobs number really helped to alleviate some of those concerns that there might be broader weakness or even prolonged softness. I think seeing that number of jobs created, solid wage growth, will help to stabilize the picture,” Ma said
Bond yields, which have surged this year, cooled slightly, perhaps helping boost tech shares. The benchmark 10-year Treasury note traded near 1.945%.
Twitter, Coca-Cola and Kellogg are scheduled to report earnings before the opening bell Thursday. Expedia, Affirm and Zillow will report after the closing bell.
U.S. stock futures were mixed early Thursday morning of ahead of key inflation data expected later in the day.