Futures tracking the S&P 500 and the Nasdaq rose on Thursday, buoyed by chip stocks, while investors kept an eye out for clues on the timing of interest rate cuts and the economic outlook as more earnings roll in.
U.S.-listed shares of Taiwan Semiconductor Manufacturing (TSMC) jumped 5.5% in premarket trading after the world’s largest contract semiconductor maker projected a more than 20% growth in 2024 revenue on booming demand for high-end chips used in artificial intelligence applications.
Nvidia (NVDA.O), Microchip Technology (MCHP.O), Marvell Technology (MRVL.O), and Advanced Micro Devices (AMD.O), rose between 1.6% and 3.2%.
Megacap stocks such as Microsoft (MSFT.O), Tesla (TSLA.O), and Meta Platforms (META.O), also gained around 1% each, as U.S. Treasury yields ticked lower.
Apple (AAPL.O), climbed 1.6% after BofA Global Research upgraded the iPhone-maker’s stock to “buy” from “neutral”.
The S&P 500 (.SPX), ended its second session in the red on Wednesday, moving farther away from its highest intraday level notched in 2022 after a strong December retail sales figure, and as policymakers continue to talk down hopes for an early start to interest rate cuts.
“We’ve seen a concerted effort from assorted central bankers to dial back expectation of early rate cuts … and some solid U.S. retail sales numbers torpedoed the idea that we would see early rate cuts in March,” said Michael Hewson, chief market analyst at CMC Markets.
The U.S. Federal Reserve is walking a tightrope to bring inflation under control without causing a growth slowdown, as the central bank’s “Beige Book” report, a snapshot of the economy’s health, showed economic activity saw little or no change from December through early January.
Money market participants now see a near-60% chance for a 25-basis point rate cut in March, lower from an over-80% probability a month ago, according to the CME Group’s FedWatch Tool.
Investors will also parse comments by Atlanta Fed President Raphael Bostic, a voting member this year, for clues on the timing of rate cuts.
On the economic data front, weekly jobless claims and housing data for December are both due at 8:30 a.m. ET.
At 7:04 a.m. ET, Dow e-minis were down 22 points, or 0.06%, S&P 500 e-minis were up 17.25 points, or 0.36%, and Nasdaq 100 e-minis were up 122.5 points, or 0.73%.
Humana (HUM.N), fell 10.9% as the health insurer forecast fourth-quarter medical costs to be higher than previously expected. Peer UnitedHealth (UNH.N), a Dow component, also lost 2.6%.
Birkenstock (BIRK.N), lost 7% after the German sandal maker missed quarterly profit expectations in its first result since going public.
Spirit Airlines (SAVE.N), fell 6% after Citigroup downgraded the stock to “sell” from “neutral”. The company’s shares have already lost nearly 60% in two sessions after a judge blocked the airline’s planned merger with rival JetBlue Airways (JBLU.O),
Discover Financial Services (DFS.N), tumbled 10.1% after reporting a 62% fall in fourth-quarter profit.
Boeing (BA.N), gained 2% after India’s Akasa Air said it has ordered 150 of the planemaker’s 737 MAX narrowbody aircraft.