Nasdaq Futures React to Nvidia Earnings with a Jump; Dow Futures Experience Dip

In the early hours of Thursday, U.S. stock index futures demonstrated a positive trend, led by Nasdaq futures, as Nvidia’s exceptional quarterly earnings performance exceeded high expectations. In contrast, Dow futures experienced a slight decline due to a drop in Boeing shares.

Here’s a snapshot of the current stock-index futures trading:

• S&P 500 futures (ES00) climbed by 17.75 points, equivalent to 0.4%, reaching 4464.
• Dow Jones Industrial Average futures (YM00) slipped by 61 points, or 0.2%, reaching 34,463.
• Nasdaq 100 futures (NQ00) surged by 143 points, or 0.9%, reaching 15,338.

In the trading session of the previous day, the Dow Jones Industrial Average registered a gain of 184 points, marking a 0.54% increase to reach 34,473. The S&P 500 saw a rise of 48 points, translating to a 1.1% increase and reaching 4436. Meanwhile, the Nasdaq Composite gained 215 points, presenting a notable 1.59% surge and reaching 13,721.

Key market dynamics include:

• Nvidia’s remarkable earnings, featuring strong sales and an optimistic third-quarter forecast, had a considerable positive impact on the broader market. This success set the stage for a significant opening rebound in the Nasdaq. Analysts emphasized the potential implications of Nvidia’s performance for the wider technology sector.
• Nvidia’s earnings success resonated throughout the market, uplifting overall sentiment. This positivity extended to stocks like Palantir Technologies (PLTR), Advanced Micro Devices (AMD), and Microsoft (MSFT), an investor in OpenAI, which all saw premarket gains.
• Dow Jones Industrial Average futures lagged behind due to nearly a 2% decline in Boeing (BA) shares, following reports of a new defect identified in the 737 Max aircraft.
• A decline in implied borrowing costs contributed to the improved market mood. The benchmark 10-year U.S. Treasury yield, which recently reached a near 16-year peak of 4.36%, retreated to 4.178%. Economic activity surveys released on Wednesday for both Europe and the U.S. suggested a weakening global economy.
• The rally in U.S. stocks and the decrease in Treasury yields were prompted by lackluster economic reports, reaffirming the market’s tendency to view negative news as a potential catalyst for the Federal Reserve to pause its interest rate hikes. According to Stephen Innes, Managing Partner at SPI Asset Management, this should be encouraging for equity investors.

With the Jackson Hole central bankers’ economic policy symposium commencing on Thursday, the focal point remains on the upcoming speech by Fed Chair Jerome Powell on Friday.

In addition, investors were privy to a fresh batch of U.S. economic data on Thursday, including weekly jobless benefit claims numbers. This data revealed a decline of 10,000 claims, reaching a three-week low of 230,000, providing further evidence of a robust labor market. Data on durable-goods orders for July indicated a 0.5% increase, excluding specific sectors like transportation and autos.

Notable companies in focus include:

• Nvidia Corp. (NVDA), which experienced an impressive 8% surge in premarket trade after announcing a 141% rise in data-center sales and record-breaking results. This positive performance had a ripple effect on Advanced Micro Devices Inc. (AMD), Taiwan Semiconductor Manufacturing Co. (TSM), and microchip equipment maker ASML Holding (ASML), all witnessing gains of 3% and 2%, respectively.
• Boeing (BA) witnessed a 2% decline in its stock, accompanied by Spirit AeroSystems (SPR) shares falling by 4%, following the revelation of an issue with fastener holes on Boeing 737 Max aircraft.
• U.S. Steel (X) stock dropped by 4% to $30.10, continuing its decline from the previous day, subsequent to Esmark retracting its offer for the company that is currently being pursued by Cleveland-Cliffs (CLF).