US stock futures climbed on Thursday following strong earnings results from Nvidia Corp., while Asian stocks saw a downturn at the open. Nvidia’s impressive performance buoyed investor sentiment, leading to gains in the S&P 500 and Nasdaq 100 futures.
Key Highlights:
Nvidia’s Impact:
- Nvidia reported second-quarter revenue projections of approximately $28 billion, exceeding analyst estimates.
- The company also announced a 10-for-1 stock split and a 150% increase in its quarterly dividend to 10 cents per share.
- Nvidia shares surged as much as 7% in after-hours trading, driving up futures for the S&P 500 and Nasdaq 100 indexes.
Asian Market Performance:
- Shares in Japan, South Korea, and Australia fell, accompanied by declines in Hong Kong equity futures.
- The S&P 500 had dropped 0.3% on Wednesday, while the Nasdaq 100 remained relatively stable.
Treasuries and Fed Outlook:
- US Treasuries remained steady in Asian trading after a sell-off on Wednesday increased yields, particularly the two-year yield, which rose by four basis points.
- Federal Reserve minutes revealed that many officials are uncertain about the extent to which current policies are restricting the economy, though the policy is seen as restrictive overall.
Currency Movements:
- The dollar maintained its strength from the previous session, hitting a one-week high.
- The Japanese yen was stable against the dollar, maintaining its lowest level since late April.
Economic Reports:
- A busy day in Asia includes inflation data from Singapore, price expectations for Australia, and China’s April Swift payments data.
- South Korea’s monetary policy decision is awaited, with markets in Indonesia closed.
- Singapore’s GDP rose slightly in the first quarter, exceeding expectations.
Tech Sector Earnings:
- US tech earnings have been robust this season, with the sector leading market revisions.
- Solita Marcelli of UBS Global Wealth Management expressed optimism about the AI trend and the strong market positions of big tech companies.
- Tom Essaye of the Sevens Report emphasized Nvidia’s importance in the market and noted the trend towards a broadening market.
Other Market Developments:
- Goldman Sachs CEO David Solomon expects the Fed will not cut rates this year due to a resilient economy bolstered by government spending.
- Anglo American Plc has agreed to talks with BHP Group following a rejected $49 billion proposal.
- The US Justice Department is set to sue Live Nation Entertainment Inc. for antitrust violations related to Ticketmaster’s control over concert ticket sales.
Commodity Markets:
- Gold edged higher after a significant drop on Wednesday due to the Fed’s meeting minutes indicating delayed rate cuts.
- West Texas Intermediate crude oil fell for the fourth consecutive day.
- Copper prices dropped sharply on signs of weakening demand.
Conclusion: Nvidia’s robust earnings have provided a boost to US stock futures, although the broader market remains cautious due to ongoing economic uncertainties and Federal Reserve policies. The performance of tech companies continues to be a bright spot, while commodities and Asian markets face pressures from various economic signals.
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