Nike stock leads Dow Jones higher as market awaits Q4 earnings

Nike (NKE) is set to deliver fiscal fourth-quarter earnings after the bell on Thursday, and shares have risen 2% in anticipation. While analysts don't expect much from Nike after prior guidance cuts, bulls are watching closely for a turnaround surprise at the US's leading footwear brand.

The Dow Jones Industrial Average (DJIA), which holds Nike among its 30 stocks, is up 0.8% on Thursday. The market is celebrating a lower Initial Jobless Claims figure for the prior week, which came in 9K below the 245K expectation. Likewise, Durables Goods Orders for May surged 16.4%, nearly double the 8.5% level that economists expected.

And while annualized Q1 GDP of -0.5% was much worse than the -0.2% anticipated, the market focused on more recent data like the rise in Pending Home Sales.

Overall, the equity market continues to benefit from the truce between Iran and Israel that began earlier this week after about two weeks of hostilities.

Nike earnings preview

Wall Street is predicting that Nike's profits will sag by 88% in fiscal Q4 due to Trump's tariff policy and slowing demand. The market is expecting adjusted earnings per share (EPS) of $0.12 on revenue of $10.71 billion.

That revenue projection is 15% below the year ago period as well. In general, analysts expect ongoing inventory clearance activity and the tariffs to shrink gross margins, and the market is waiting for Nike to raise guidance or come up with a new strategy.

New CEO Elliott Hill has said he will take Nike products back to Amazon's website in order to increase sales and exposure. Nike took its footwear off of Amazon in 2019 in order to focus on growing margins and their own direct-to-consumer digital strategy.

On the fun side, some analysts will likely use the earnings call to bring up Nike's new Air Max Phenomena release. The "whimsical" design is part loafer, part sneaker and is referred to as a snoafer. While many older customers find it funny-looking, other brands like Hoka and New Balance already offer their own versions, which are worn by Gen-Z office workers.

The resale site StockX is already pre-selling the yet-to-be-released shoe for upwards of $500.

However, most of the focus on the earnings call will be on the guide for Q1. Investors want to see if the inventory issues are behind for Nike and how it is dealing with tariff rates placed on Chinese and Vietnamese merchandise. Trump's 90-day pause on national tariffs will end on July 9, and investors will wonder what to expect on that front.

Nike stock chart

After reconquering the 50-day Simple Moving Average (SMA) over the past month, Nike's share price has stalled out in the low $60s.

Nike stock is down about 65% from its November 2021 highs near $180, but at the moment, the footwear brand needs to focus on the region just 10% to 15% higher. The 200-day SMA coincides with the long-term top trendline near $72, and bulls will either use that as a target or the prize to win in order to end the nearly four-year downtrend.

Support lies somewhere in the low $50s, where Nike sold off in early April after Trump attempted to slap 45% tariffs on Vietnam, the country where Nike produces most of its gear.

Nike daily stock chart