S&P 500, Dow futures edge higher on Mideast hopes
Futures tied to the Nasdaq lagged as upbeat forecasts from SpaceX and AMD failed to impress investors.
US futures for the S&P 500 and Dow edged higher on Wednesday, buoyed by optimism surrounding a potential Middle East peace deal, while the Nasdaq 100 lagged as positive predictions from SpaceX and AMD fell short of investor expectations. SpaceX, under Elon Musk's leadership, reported nearly double its revenue and a narrowing of operating losses in its inaugural earnings report since going public, driven by its burgeoning Starlink satellite communications and AI ventures.
However, the company's shares dropped 11.7% premarket trading as executives disclosed that the spending necessary to sustain its ambitious goals remains ongoing, potentially subjecting its shares to further pressure following the expiration of its post-IPO lock-up period starting Thursday. Additionally, Tesla experienced a 1% decline.
Analyst Nic Puckrin opined that SpaceX's revenue beat, coupled with unquenchable AI spending, signified the conclusion of the year's earnings narrative. AMD forecasted quarterly revenue surpassing expectations, a result of robust AI demand, yet its shares slipped 9.2%, indicating investors sought a more compelling outlook to justify the stock's 142% year-to-date gain.
Nvidia's shares, which trailed AMD this year, rose 2%, supported by SpaceX's intention to utilize the firm's hardware for constructing their data centers. Other semiconductor firms, such as Intel and Micron, experienced declines exceeding 2%, while megacap tech stocks Microsoft and Alphabet remained flat as Wall Street paused following a series of sessions that propelled the S&P 500 and Dow to record highs.
However, other sectors exhibited strength, with Eli Lilly rising 4.2% after elevating its full-year revenue forecast and Disney gaining 4.5% after surpassing third-quarter profit forecasts. Arista Networks also surged 13.3% after forecasting third-quarter revenue exceeding estimates. At 6:54am, the Dow E-minis climbed 202 points, or 0.37%, while the S&P 500 E-minis rose 31.5 points, or 0.41%, whereas the Nasdaq 100 E-minis fell 4.25 points, or 0.01%.
The market's attention remains fixated on a private national employment survey slated for 8:15am, which could shed light on the labor market's performance in July, ahead of the official non-farm payrolls data due on Friday. The survey on services sector activity from the preceding month is also due at 10am. Data has consistently indicated a robust economic climate, but Middle East tensions have kept energy prices elevated, and the Federal Reserve has yet to provide any insights on monetary policy, thereby fostering ongoing uncertainty.
Fed Governor Jeff Schmid, a non-voting member of the Federal Open Market Committee, suggested during a recent remarks that some form of monetary policy tightening is necessary to bring inflation back to the 2% target. Governor Lisa Cook and San Francisco Fed President Mary Daly's perspectives on interest rates will be closely examined. Traders price a 58.4% chance of a September rate hike, according to the CME Group's FedWatch Tool.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
