After the severe pounding the tech space received in the past three sessions, it might be rebound time. However, any recovery will largely hinge on whether key inflation data confirms the continued downward trajectory in pricing pressure. The major index futures are notably higher early Friday. Tamer inflation data could reinforce hopes of a September rate hike and more for the rest of the year, proving supportive of the market rally, especially amid the small-cap space.

Traders may also take cues from some quarterly reports as they nervously wait for next week’s earnings news flow from the likes of Apple, Inc. (NASDAQ:AAPL), Amazon, Inc. (NASDAQ:AMZN), Microsoft Corp. (NASDAQ:MSFT) and Meta Platforms, Inc. (NASDAQ:META) and the Federal Reserve’s rate-setting meeting.

In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) moved down 0.75% to $542.43, while the Invesco QQQ ETF (NASDAQ:QQQ) gained 1.00% to $462.87, according to Benzinga Pro data.

Cues From Last Session:

U.S. stocks closed Thursday’s session on a mixed note, as early optimism generated by strong GDP data did not sustain throughout the session. Negative tech news weighed down on the Nasdaq Composite and the S&P 500 indices, sending them notably lower for a third straight day. The former pulled back toward its lowest close since June 7, and the latter slumped to the lowest since June 11.

The 30-stock Dow Jones Industrials Average ignored a negative start and traded mostly above the unchanged line, with International Business Machine Co.’s (NYSE:IBM) 4%+ gain lending support.

Second-quarter GDP rose at an annualized quarter-over-quarter pace of 2.8%, faster than the 1.4% growth in the first quarter and the core PCE inflation slowed. Comerica Chief Economist Bill Adams commented on the report, “The GDP report will reassure the Fed that there's no need for immediate rate cuts.”

“The Fed is expected to hold their policy rate steady at next Wednesday's decision and signal a cut coming in September,” he added.

Energy, industrial and utility stocks gained ground in the session, while the IT and communication services stocks were among the biggest decliners.

Insights From Analysts:

Commenting on the recent market pullback, spearheaded by the tech stocks, LPL Chief Technical Strategist Adam Turnquist said, “Technical damage is beginning to mount for the broader market.”

Thursday’s decline led the S&P 500 to break below key support at the 20-day moving average, violating a short-term uptrend. “Momentum confirmed the breakdown as select indicators turned bearish for the first time in several months, ” he said.

Turnquist said the pullback was due to the weakness seen in mega-caps as well as the historically overbought conditions. “The good news is that there is still a lot of support in play before the S&P 500's longer-term uptrend is challenged and strong momentum tends to be sustainable on a longer-term basis, although the path is not linear,” the strategist said.’

“Based on this backdrop, we recommend a neutral equities allocation and tactically buying dips once support is established and momentum improves.”

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Commodities, Bonds And Global Equity Markets:

Crude oil futures pulled back after two straight sessions of gains, as they traded around $78_a-barrel, while gold futures rebounded from Thursday’s sharp pullback. The 10-year Treasury note yielded 4.242%, down 1.2 basis points. Bitcoin (CRYPTO: BTC) climbed over 5% and traded above the $67K mark.

The major Asian markets closed on a mixed note, with the Taiwanese market, which remained closed on Thursday, playing catchup with the losses in the region. The Japanese, Malaysian, New Zealand and Singaporean markets ended lower, while the remainder of the major markets advanced.

European stocks are higher in early trading on Friday.

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