Dow Jones futures turned higher early Thursday, along with S&P 500 futures and Nasdaq futures on the stock market today, erasing modest losses on the PPI inflation report. That followed Wednesday’s hot CPI inflation report, which hit the major indexes. Meanwhile, artificial intelligence leaders Nvidia (NVDA) and Microsoft (MSFT) are in focus.
decisions on interest rates impact both the economy and the stock market. IBD News Editor Ed Carson shares how reactions by each can differ and what investors need to know.” vid-name=”Fed Interest Rate Decisions: Market Influence And Investor Psychology Impact Of Cuts And Hikes” vid-cat=”Industry Insights” vid-date=”03/20/2024″ vid-date-tmsp=”1710938202″ vid-image=”https://www.investors.com/wp-content/uploads/2024/03/cReAVOpP-640×360.jpg” vid-authors=”MEREDITH HEYMAN”>
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The S&P 500 and Nasdaq did find support at their 10-week moving averages Wednesday, with Nvidia providing some support. But the Russell 2000 gapped below its 50-day line with the Dow Jones clearly below that key level.
Nvidia and Microsoft stock got new price target hikes early Thursday. Nvidia stock nudged higher after Wednesday’s buck-the-trend bounce, while Microsoft edged up.
And at another Magnificent Seven company, Amazon.com (AMZN), Chief Executive Andy Jassy pledged to continue cost cuts while pushing hard into artificial intelligence, including its own AI chips.
Elsewhere, Vertex Pharmaceuticals (VRTX) edged lower on a takeover deal for Alpine Immune Sciences (ALPN), which soared. Regeneron Pharmaceuticals (REGN) fell modestly after the Justice Department accused it overcharging Medicare for its key drug Eylea.
Fastenal (FAST) and CarMax (KMX) sold off after both missed on earnings and sales early Thursday. Constellation Brands (STZ) rose after topping analyst forecasts.
PPI Inflation
In economic news, the Labor Department released the March producer price index and weekly jobless claims at 8:30 a.m. ET Thursday.
The March PPI rose 0.2% after February’s 0.6% jump, below views for a 0.3% gain. Core PPI, which excludes food and energy, met forecasts for a 0.2% advanced.
PPI inflation came in at 2.1% vs a year earlier, picking up from February’s 1.6% but below expectations for 2.3%. Core PPI inflation stepped up to 2.4%, up from February’s 2% and slightly above views for 2.3%.
Key elements in the PPI report feed directly into the core PCE price index, the Fed’s favorite inflation report.
Further, initial jobless claims fell 11,000 to 211,000 in the week ended April 6, below views for 215,000.
Dow Jones Futures
Dow Jones futures rose a fraction vs. fair value on the stock market today, along with S&P 500 futures. Nasdaq 100 futures climbed 0.3%. All had been down modestly before the PPI report.
The 10-year Treasury yield declined to 4.53%. Crude oil futures fell slightly.
Remember that premarket action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.
Stock Market Falters
In Wednesday’s stock market trading, the Dow Jones index fell 1.1% to a two-month low as consumer inflation came in hotter than expected. The S&P 500 and Nasdaq composite sank 0.95% and 0.8%, respectively, both sliding through the 21-day line. The Russell 2000 gapped down 2.5%.
The stock market rally is under pressure.
The 10-year Treasury yield yield spiked 19 basis points to 4.56%, the highest since mid-November.
Markets now see just two rate cuts in 2024, and even that’s shaky. Investors are starting to price in a small chance there will be no Fed rate cuts this year.
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Nvidia, Microsoft Stock Price Targets Raised
Nvidia stock rose a fraction Thursday. Raymond James raised its price target to 1,100 from 850, signaling 26% upside for the AI chip leader.
On Wednesday, shares rose 2% to 870.39, rebounding from the 10-week line to just below the 21-day line.
Nvidia stock is on track to have a flat base soon with a 974 buy point. Investors could use a decisive move above the 21-day line and breaking a very short trendline as an early entry.
Microsoft stock edged higher on the stock market today. Morgan Stanley raised its price target on Microsoft stock to 520 from 465, citing its generative AI leadership.
On Wednesday, the Dow giant dipped 0.7% to 423.26, but rebounded from the 21-day and held a 420.82 buy point from a short consolidation. Microsoft stock could be working on a three-weeks-tight pattern.
Amazon Hits Sweet Spot For Investors
Amazon CEO Jassy hit two sweet spots for investors in his annual shareholder letter, touting cost cuts and a focus on AI. He touted Amazon’s own in-house chips.
That follows the lead of other Magnificent Seven companies. Microsoft has developed its own in-house AI chips. Google-parent Alphabet (GOOGL) and Meta Platforms (META) both unveiled their own AI chips as well this week, with Google using designs from Arm Holdings (ARM).
The aim is to lessen reliance on Nvidia’s advanced AI chips.
Amazon stock edged higher early Thursday. Shares edged up 0.15% to 185.95 on Wednesday, a record close.
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Biotech News On Stock Market Today
In biotechs, Vertex Pharmaceuticals will pay $65 a share or $4.9 billion, for Alpine Immune Sciences, which is working on a treatment for inflammatory kidney diseases. That’s a 67% premium to Tuesday’s close. Alpine stock soared 37% early Thursday after jumping 21% Wednesday on takeover buzz.
Vertex stock lost a fraction, aided by an Evercore upgrade to outperform. Shares are in a flat base with a 448.40 buy point, but have been trending lower since late January.
Regeneron Pharmaceuticals fell 2% late Wednesday after the Justice Department filed a complaint, accusing the biotech of fraudulently inflating Medicare reimbursement rates for eye drug Eylea by hundreds of millions of dollars.
Regeneron stock has a 998.33 flat-base buy point, but is trading below its 50-day line, according to MarketSurge. Shares are threatening to open at a three-month low.
Read The Big Picture every day to stay in sync with the market direction on the stock market today.
Please follow Ed Carson on  Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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