Stock futures signaled a positive start to the trading day, with September S&P 500 futures (ESU23) up by +0.49%, and September Nasdaq 100 E-Mini futures (NQU23) surging by +1.13% in early morning trading. The market drew optimism from Nvidia’s remarkable Q2 results, leading to a surge of +8% in the pre-market session. The semiconductor powerhouse exceeded expectations for Q2 earnings, provided an upbeat Q3 revenue outlook, and unveiled plans for an additional $25B stock repurchase. Notably, Stifel upgraded Nvidia from Hold to Buy, further elevating investor sentiment.
In yesterday’s trading session, Wall Street experienced gains across major indices, with the Nasdaq 100 achieving a one-week high. Netflix (NASDAQ:NFLX) contributed to the positive trend, climbing over +3% after Antenna, a research firm, revealed the company’s addition of approximately 2.6 million new subscribers in July. Chip stocks also performed well, as the 10-year Treasury yield retreated from a nearly 16-year peak. AMD (NASDAQ:AMD) and Marvell (NASDAQ:MRVL) both saw gains exceeding +3%. Additionally, Advance Auto Parts (NASDAQ:AAP) marked a rise of over +3% after appointing a new CEO and initiating a strategic review.
However, Foot Locker (NYSE:FL) faced a decline of -28% due to a reduction in its annual guidance and suspension of quarterly dividends.
Economic data from Wednesday indicated an unexpected drop in the U.S. S&P Global Composite PMI to 50.4 for August, fueling speculation that the Federal Reserve might reconsider its rate hike strategy. Conversely, U.S. new home sales reached a 1.5-year high of 714K in July, surpassing forecasts of 705K.
“In terms of economic data, the market seems to interpret bad news as potentially good news, particularly in relation to PMIs in the U.S. and Europe. This interpretation hints at expectations of a halt in future rate hikes, which is favorable for AI and tech stocks,” stated Grace Tam, chief investment advisor for Hong Kong at BNP Paribas Wealth Management.
Investor attention is now directed towards Federal Reserve Chairman Jerome Powell’s upcoming speech at the Jackson Hole central bank symposium on Friday. The speech is anticipated to provide insights into the U.S. rate outlook. U.S. rate futures suggest a 13.5% probability of a 25 basis point rate increase at the September FOMC meeting and a 40.1% likelihood of a similar hike in November.
Key companies such as Intuit (NASDAQ:INTU), TD Bank (NYSE:TD), Workday (NASDAQ:WDAY), Ulta Beauty (NASDAQ:ULTA), and Marvell (NASDAQ:MRVL) are set to release their quarterly results today.
Today, U.S. Durable Goods Orders data holds the spotlight. Economists predict a -4.0% m/m figure for July, in contrast to the previous +4.7% m/m reading. Additionally, attention will be on U.S. Core Durable Goods Orders data, forecasted to be +0.2% m/m for July, following a +0.6% m/m reading in June. U.S. Initial Jobless Claims data is also scheduled, with a consensus estimate of 240K, slightly higher than the prior week’s 239K.
In the bond market, the yield on the United States 10-year Treasury stands at 4.184%, reflecting a -0.38% drop.
European markets are gaining ground, with Euro Stoxx 50 futures up by +0.56% due to improved risk sentiment bolstered by Nvidia’s strong earnings and the possibility of central banks pausing rate hikes due to sluggish economic data. Technology stocks are leading the charge, with Asm International N.V. (ASM.NA), BE Semiconductor Industries N.V. (BESI.NA), and Asml Holding (ASML.NA) all rising over +1%. Retail stocks are also performing well. The outlook for a pause in interest rate hikes by the European Central Bank has invigorated investors, sparked by indicators of weakened business activity across Europe. Symrise Ag (SY1.D.DX) witnessed a more than +2% increase following an upgrade by Morgan Stanley.
The European economic calendar remains relatively light for Thursday.
Asian markets closed positively, with China’s Shanghai Composite Index (SHCOMP) edging up by +0.12%, and Japan’s Nikkei 225 Stock Index (NIK) rising by +0.87%.
China’s Shanghai Composite Index saw slight gains as investors seized the opportunity following recent declines. Lingering concerns over a potential economic slowdown in China tempered the gains. The People’s Bank of China’s decision to set a daily reference rate exceeding expectations provided support to the yuan. Although consumer sentiment in China exhibited a modest improvement in August, concerns remain due to a challenging year for the economy. Stocks related to artificial intelligence and semiconductors led the upswing, propelled by Nvidia’s strong performance. China’s trust industry, however, displayed signs of strain, adding pressure to the economy. Some insiders expressed reservations about the effectiveness of local government financing vehicle stability efforts.
According to Yang Delong, Chief Economist at First Seafront Fund Management, “The current low and attractive valuations make it a favorable time for long-term investors to buy Chinese stocks.”
Japan’s Nikkei 225 Stock Index achieved a four-session winning streak, the longest since mid-June. The positive momentum was driven by robust earnings from U.S. chip giant Nvidia, which uplifted semiconductor-related shares. Tokyo Electron, a chip-making equipment leader, soared over +3%, while Advantest, a chip-testing machine manufacturer, advanced by more than +1%. SoftBank Group, an investor focused on AI startups, experienced a gain of over +2%. Pacific Metals Co. Ltd. secured the top spot in percentage gainers on the Nikkei, surging over +5% after announcing a deal to develop nickel refining technology utilizing microwaves to reduce greenhouse gas emissions. The Nikkei Volatility, an indicator of implied volatility, decreased by -2.72% to 17.89.
Pre-market Movers in the U.S.
Guess? (NYSE:GES), which surged +18% after posting strong Q2 results and raising its FY24 guidance. C3.ai Inc (NYSE:AI), Palantir (NYSE:PLTR), and Marvell (NASDAQ:MRVL) also experienced gains of more than +4% after Nvidia’s impressive performance. Splunk Inc (NASDAQ:SPLK) rose by over +12% after reporting Q2 results exceeding expectations and raising its FY24 revenue outlook. Autodesk (NASDAQ:ADSK) witnessed a more than +5% surge after upbeat Q2 results and a solid FY24 guidance report. Kenvue Inc (NYSE:KVUE) gained over +2% following an upgrade by Goldman Sachs from Neutral to Buy. Conversely, Vizio Holding (NYSE:VZIO) dropped by about -5% after BofA downgraded the stock from Buy to Underperform.
Notable U.S. Earnings Releases for Today
Intuit (INTU), TD Bank (NYSE:TD), NetEase (NASDAQ:NTES), Workday (NASDAQ:WDAY), Marvell (NASDAQ:MRVL), Dollar Tree (NASDAQ:DLTR), Ulta Beauty (NASDAQ:ULTA), Huazhu (NASDAQ:HTHT), Burlington Stores (NYSE:BURL), Futu (NASDAQ:FUTU), Affirm (NASDAQ:AFRM), Frontline (NYSE:FRO), Gap (NYSE:GPS), Weibo Corp (NASDAQ:WB), PagSeguro Digital (NYSE:PAGS), Nordstrom (NYSE:JWN), Credo Technology (NASDAQ:CRDO), OSI Systems (NASDAQ:OSIS), Petco Health and Wellness (NASDAQ:WOOF), Opera (NASDAQ:OPRA), The Hain Celestial (NASDAQ:HAIN), Movado (NYSE:MOV), and Youdao (NYSE:DAO).
Featured Image: Megapixl
Author Faith Yakubu 
