Mixed start looks on tap for U.S. stocks after Fitch warning, Nvidia results


U.S. stock futures were mixed Thursday as Nvidia results boosted tech but debt ceiling concerns weighed on the Dow.

How are stock-index futures trading

  • S&P 500 futures ES00, +0.57% rose 21 points, or 0.5%, to 4147
  • Dow Jones Industrial Average futures YM00, -0.26% fell 107 points, or 0.3%, to 32747
  • Nasdaq 100 futures NQ00, +1.78% jumped 225 points, or 1.6%, to 13875

On Wednesday, the Dow Jones Industrial Average DJIA, -0.77% fell 256 points, or 0.77%, to 32800, the S&P 500 SPX, -0.73% declined 30 points, or 0.73%, to 4115, and the Nasdaq Composite COMP, -0.61% dropped 76 points, or 0.61%, to 12484.

What’s driving markets

Recurring fiscal concerns are battling with a nascent technological paradigm for the market’s lead. Fears about the looming debt-ceiling deadline is counteracted by ebullience over AI to deliver a stark bifurcation.

Futures for the Dow Jones Industrial Average — a gauge arguably currently more sensitive to broader economic conditions — were under pressure early Thursday, while futures for the tech-rich Nasdaq 100 — powered by optimism over a secular AI shift — surged strongly.

“The prospect of the U.S. government being unable to meet its financial obligations continues to be a key influence on investor sentiment in global equity markets,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

Ructions at the short end of the Treasury market — where some 1-month bill yields TMUBMUSD01Y, 5.207% broke above 7% — illustrate trader anxiety that unless Congress can reach an agreement to extend the debt-ceiling the U.S. government may technically default at the beginning of June.

Ratings agency Fitch late Wednesday said it was placing Washington’s AAA credit rating on watch for a possible downgrade given what it termed the debt ceiling “brinkmanship”.

However, results and comments from chipmaker Nvidia NVDA, -0.49%, whose stock is soaring 25% in premarket action, have boosted hopes that AI will deliver the next period of strong growth for a number of tech companies.

“The AI revolution may be making a lot of noise but results from microchip firm Nvidia hint at some substance behind the hype,” said Russ Mould, investment director at AJ Bell.

CS.ai Inc. AI, +2.54% and Advanced Micro Devices AMD, +0.14% were among those bathing in Nvidia’s AI glow early Thursday.

The optimism over semiconductors bade well for the wider tech sector, according to Mark Newton, head of technical strategy at Fundstrat: “Semis in relative terms to broader technology, have the potential to break back out to new all-time highs this week on a ratio basis. That would be important and positive for this leading sector to show such strength.”

U.S. economic updates set for release on Thursday include the weekly initial jobless claims data and the second reading of first quarter GDP, both at 8:30 a.m. Eastern. Pending home sales for April will be published at 10 a.m..

Fed officials making comments include Richmond Fed President Tom Barkin speaking at 9:50 a.m. and Boston Fed President Susan Collins talking at 10:30 a.m.

This article was originally published by Marketwatch.com. Read the original article here.

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