US Futures Steady as Nvidia Results Grab Spotlight: Markets Wrap

(Bloomberg) — US equity futures pointed to a steady open for Wall Street as investors awaited pivotal earnings from Nvidia Corp. to see if the artificial intelligence powerhouse can keep this year’s equity rally going. 

Futures on the Nasdaq 100 traded flat, while those on the S&P 500 edged lower. Nvidia shares slipped 0.4% in premarket trading, having hit fresh record highs this week. Its results, seen as the grand finale of a robust US earnings season, are projected to show a 243% increase in revenue, but a 90% year-to-date share rally could set a high bar for further gains.

Markets are also growing jittery about the prospect of stubbornly high inflation which could prevent central banks from easing policy as early as anticipated. Latest UK data showed inflation slowing less than expected last month, while Federal Reserve policymakers have repeatedly hinted at the need for a wait-and-see stance on cutting rates. 

“With stocks sitting on record highs investors will need to see economic data that remains ‘goldilocks,’ the absence of any hawkish Fed surprises, steady yields, good retailer earnings, and solid guidance from AI bellwether Nvidia to meaningfully advance beyond current levels,”  Tom Essaye at the Sevens Report said in a note to clients.  

Europe’s Stoxx 600 equity index shed 0.3%, as traders pushed back expectations for the timing of the first Bank of England rate cut. UK gilt yields rose more than 10 basis points, lifting borrowing costs across Europe, while US 10-year Treasury yields also edged higher.

The UK data came hours after the Reserve Bank of New Zealand kept interest rates unchanged and signaled policy will stay tight for longer, while on Tuesday, Fed Governor Christopher Waller said he needs to see several more good inflation numbers to begin rate cuts. Minutes from the Fed’s policy meeting, due later Wednesday, could offer clues on rate-setters’ thinking.

“Both the RBNZ and the UK inflation data highlight the fraught nature of the current juncture, with investors struggling to gauge both the timing and extent of long-awaited central bank easing cycles,” said Rabobank’s head of rates strategy, Richard McGuire. 

Among US premarket stock movers, Target Corp. shed almost 7% after its earnings forecast undeshot estimates, Lululemon Athletica Inc. dropped as much as 4% after announcing organizational changes and Tesla Inc. slid 1.8% after disclosing European sales fell to a 15-month low in April.

Equity Trading Volume Is So Low It Feels Like Summer Holidays

Investors in Europe are watching to see if miner BHP Group Ltd. will launch its takeover bid for rival Anglo American Plc in what could be among the world’s biggest deals this year. BHP has a deadline of 5 p.m. London time to announce a firm intention to make an offer. Anglo shares traded weaker on the day. 

 

Key events this week:

• US existing home sales, Wednesday
• Fed minutes, Wednesday
• Nvidia earnings, Wednesday
• Eurozone S&P Global services and manufacturing PMIs, consumer confidence, Thursday
• G-7 finance meeting, May 23-25
• US new home sales, initial jobless claims, Thursday
• Fed’s Raphael Bostic speaks, Thursday
• US durable goods, consumer sentiment, Friday
• Fed’s Christopher Waller speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.4% as of 12:43 p.m. London time
• S&P 500 futures fell 0.1%
• Nasdaq 100 futures were little changed
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index fell 0.2%
• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.2% to $1.0827
• The Japanese yen fell 0.3% to 156.58 per dollar
• The offshore yuan was little changed at 7.2511 per dollar
• The British pound was little changed at $1.2706

Cryptocurrencies

• Bitcoin rose 0.3% to $69,954.76
• Ether fell 0.5% to $3,726.41

Bonds

• The yield on 10-year Treasuries advanced four basis points to 4.45%
• Germany’s 10-year yield advanced five basis points to 2.55%
• Britain’s 10-year yield advanced 10 basis points to 4.23%

Commodities

• Brent crude fell 1% to $82.06 a barrel
• Spot gold fell 0.6% to $2,406.53 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu.

©2024 Bloomberg L.P.