U.S. stock index futures experienced a slight uptick following Netflix's (NFLX) impressive financial performance, which is expected to extend the rally in major tech shares. The S&P 500 futures rose by 0.2%, Nasdaq 100 futures increased by 0.5%, while Dow Jones futures remained relatively flat. In pre-market trading, Netflix shares surged 6% due to better-than-expected third-quarter key performance metrics, including new subscriber growth.
Apple (AAPL, Financial) showed strength as data indicated a 20% increase in sales for its latest iPhone models in China compared to those released in 2023.
Small-cap stocks have benefited from the improving U.S. economic landscape. The Russell 2000 index is nearing its yearly peak, fueled by weak inflation that has led the market to speculate about potential Federal Reserve rate cuts, albeit not as significant as previously imagined.
Bank of America strategist Michael Hartnett noted that small-cap stocks are also gaining support from what is known as the "Trump trade." He mentioned signs that investors are positioning for a potential Trump election victory, with increased inflows into banks, small-cap stocks, and the dollar, sectors that strengthened after Trump's win in November 2016.
Gene Salerno, Chief Investment Officer at SG Kleinwort Hambros Ltd., expressed hope that the stock market's upward momentum could expand beyond the mega-cap tech stocks.
