Tech Stocks May Lead Early Uptick On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Tuesday, with tech stocks likely to see further upside after leading the markets higher last Friday.

Shares of Nvidia (NVDA) are surging by 3.0 percent in pre-market trading, as the AI darling seems poised to continue to benefit from last week's upbeat earnings news.

Nvidia reported better than expected fiscal first quarter results and provided upbeat guidance while also announcing a ten-for-one stock split and increasing its quarterly cash dividend by 150 percent to $0.10 per share.

The S&P 500 futures are also inching up by 0.1 percent, although the Dow futures are edging down by 0.1 percent. The blue chip index may continue to underperform after pulling back sharply last week.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the release of key inflation data later this week.

On Friday, the Commerce Department is due to release its report on personal income and spending in the month of April, which includes readings on inflation said to be preferred by the Federal Reserve.

The inflation data could have a significant impact on the outlook for interest rates ahead of the Fed's next monetary policy meeting on June 11-12.

In an interview with CNBC this morning, Minneapolis Fed President Neel Kashkari said he needs to see "many more months of positive inflation data" before he would consider cutting interest rates.

Kashkari, who does not have a vote on the rate-setting Federal Open Market Committee this year, also said he could not rule out raising interest rates if inflation fails to slow.

Following the downturn seen over the course of last Thursday's session, stocks showed a strong move back to the upside during trading on Friday. The tech-heavy Nasdaq led the rebound, surging to a new record closing high.

The Nasdaq jumped 184.76 points or 1.1 percent to 16,920.94 and the S&P 500 climbed 36.88 points or 0.7 percent to 5,304.72, while the narrower Dow ended the day roughly flat, inching up just 4.33 points or less than a tenth of a percent to 39,069.59.

While the Nasdaq shot up by 1.4 percent for the week, the S&P 500 was nearly unchanged and the Dow tumbled by 2.3 percent.

The rebound on Wall Street came as traders looked to pick up stocks at somewhat reduced levels following the downturn seen on Thursday, which saw the Dow post its worst daily drop since March 2023.

The weakness that emerged on Wall Street on Thursday came as a positive reaction to earnings news from Nvidia was overshadowed by lingering concerns about the outlook for interest rates.

On the U.S. economic front, the Commerce Department released a report showing an unexpected increase in durable goods orders in the month of April, although the growth came following a significantly downwardly revised jump in March.

The report said durable goods orders climbed by 0.7 percent in April following a downwardly revised 0.8 percent advance in March.

Economist had expected durable goods orders to decrease by 0.8 percent compared to the 2.6 percent surge originally reported for the previous month.

Excluding orders for transportation equipment, durable goods orders rose by 0.4 percent in April after coming in unchanged in March. Ex-transportation orders were expected to inch up by 0.1 percent.

A separate report released by the University of Michigan showed consumer sentiment in the U.S. deteriorated slightly less than previously estimated in the month of May.

The report said the consumer sentiment index for May was upwardly revised to 69.1 from the preliminary reading of 67.4. Economists had expected the index to be unrevised.

Despite the upward revision, the consumer sentiment index still fell sharply from 77.2 in April, slumping to its lowest level since hitting 61.3 last November.

Meanwhile, the report showed year-ahead inflation expectations increased by much less than previously estimated, inching up to 3.3 percent in May from 3.2 percent in April.

The University of Michigan had previously reported year-ahead inflation expectations jumped to 3.5 percent, although the downwardly revised figure still represents the highest level since hitting 4.5 percent last November.

The revised data also showed long-run inflation expectations held steady at 3.0 percent for the second straight month compared to the previously reported uptick to 3.1 percent.

Semiconductor stocks showed a significant move to the upside on the day, driving the Philadelphia Semiconductor Index up by 1.9 percent to a new record closing high.

Chipmaker Nvidia shot up by 2.6 percent, extending the surge seen on Thursday following the AI darling's strong quarterly results.

Computer hardware and networking stocks also turned in strong performances, contributing to the jump by the tech-heavy Nasdaq.

Considerable strength was also visible among brokerage stocks, as reflected by the 1.8 percent gain posted by the NYSE Arca Broker/Dealer Index.

Gold, housing and airline stocks also saw notable strength on the day, while most of the other major sectors showed more modest moves.

Commodity, Currency Markets

Crude oil futures are surging $1.32 to $79.04 a barrel after climbing $0.85 to $77.72 a barrel last Friday. Meanwhile, after edging down $2.70 to $2,334.50 an ounce in the previous session, gold futures are advancing $19.70 to $2,354.20 an ounce.

On the currency front, the U.S. dollar is trading at 156.67 yen versus the 156.86 yen it fetched on Monday. Against the euro, the dollar is trading at $1.0874 compared to yesterday's $1.0858.

Asia

Asian stocks fluctuated before closing lower on Tuesday, as investors remained focused on upcoming U.S. and European inflation data for additional clues on the path of interest rates.

The dollar extended weakness to hit a one-week low as market participants awaited the U.S. PCE price index report due later this week as well as speeches from Fed officials for more clarity on the outlook for monetary policy.

Traders also looked ahead to the release of German and Eurozone inflation figures this week that could cement expectations for an ECB rate cut next week.

Oil and gold prices fell slightly in Asian trading despite increased tensions in the Middle East following the death of an Egyptian soldier during a clash with Israeli troops.

Chinese markets ended lower after rising in initial trading as the financial hub of Shanghai lowered down-payment ratios and the minimum mortgage threshold as part of measures to boost the property market.

China's Shanghai Composite Index ended down 0.5 percent at 3,109.57, while Hong Kong's Hang Seng Index finished marginally lower at 18,821.16.

Japanese markets ended modestly lower after data showed Japanese service prices rose at the fastest clip in over 30 years, boosting the case for gradual increase in interest rates.

However, the central bank's key measurements of underlying inflation in April all fell below its 2 percent target for the first time since August 2022, stoking fresh uncertainty over the timing of rate hikes.

The Nikkei 225 Index slipped 0.1 percent to 38,855.37, while the broader Topix Index settled marginally higher at 2,768.50.

Seoul stocks ended little changed, with the Kospi finishing marginally lower at 2,722.85 after a choppy session. LG Energy Solution dropped 1.2 percent, LG Chem shed 1.4 percent and Samsung SDI lost 2.5 percent, while Samyang Foods rallied 3.7 percent.

Australian stocks closed modestly lower as April retail sales data missed expectations and investors awaited Wednesday's inflation data for clues on monetary policy.

The benchmark S&P ASX 200 Index dipped 0.3 percent to 7,766.70, dragged down by miners and financials. The broader All Ordinaries Index ended down 0.3 percent at 8,034.90.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 Index fell 0.6 percent to 11,682.51, marking its third consecutive session of losses.

Europe

European stocks have moved mostly lower during trading on Tuesday as investors await key inflation readings from the U.S. and Eurozone this week for directional cues.

Meanwhile, an ECB survey showed earlier today that consumers lowered their inflation expectations last month.

Eurozone consumers' expectations for inflation in the next 12 months eased to 2.9 percent from 3.0 percent a month earlier to hit their lowest level since September 2021.

German wholesale prices declined at a slower pace in April, separate data published by Destatis revealed. Wholesale prices dropped 1.8 percent on a yearly basis in April, following a 3.0 percent decline in March.

Elsewhere, U.K. shop price inflation weakened in May to the lowest since November 2021 as non-food prices continued to decline, data from the British Retail Consortium and the market research firm NielsenIQ showed.

The shop price index posted an annual increase of 0.6 percent in May after a 0.8 percent gain in April. This was the slowest growth since November 2021.

While the French CAC 40 Index has slid by 0.7 percent, the U.K.'s FTSE 100 Index is down by 0.3 percent and the German DAX Index is down by 0.1 percent.

In corporate news, Norway's Cadeler A/S has shown a notable move to the downside after logging a loss in the first quarter.

TomCo Energy has also slumped. The U.S. operating oil development group announced that Chief Executive Officer John Potter, who was 54, passed away suddenly on May 24.

Softcat, a provider of IT infrastructure products and services, has also declined despite backing its full-year profit guidance.

Meanwhile, Rheinmetall AG, a German automotive and arms maker, has risen after securing an order from a European customer country for the supply of 35mm AHEAD ammunition for the Skynex air defense system.

Intermediate Capital Group has surged in London after the investment firm showcased impressive growth and revenue milestones for the year ending March 31, 2024.

Thyssenkrupp shares have also jumped. Thyssenkrupp Materials Services, a part of the German industrial, said its Chairman Martin Stillger has decided to resign from his position effective May 31, 2024, on mutual agreement.

Flavour and fragrance maker Symrise has also shown a strong move to the upside as Deutsche Bank raised its rating on the stock.

U.S. Economic Reports

Standard & Poor's is scheduled to release its report on home prices in major metropolitan areas in the month of March at 9 am ET.

At 9:55 am ET, Minneapolis Federal Reserve President Neel Kashkari is due to speak and participate in a panel before the Barclays-CEPR International Monetary Policy Forum.

The Conference Board is scheduled to release its report on consumer confidence in the month of May at 10 am ET. The consumer confidence index is expected to fall to 95.3 in May after slumping to 97.0 in April.

The Treasury Department is due to announce the results of this month's auctions of $69 billion worth of two-year notes and $70 billion worth of five-year notes at 11:30 am ET and 1 pm ET, respectively.

At 1:05 pm ET, Federal Reserve Board Governor Lisa Cook is scheduled to participate in a discussion on "AI and the Economy" before an AI-nomics: The Nexus of GenAI + the Economy event hosted by the San Francisco Federal Reserve.

Stocks In Focus

Shares of GameStop (GME) are skyrocketing in pre-market trading after the video game retailer said it raised approximately $933.4 million from its previously disclosed "at-the-market" equity offering program.

U.S. Cellular (USM) is also seeing significant pre-market strength after announcing an agreement to sell its wireless operations and select spectrum assets to T-Mobile (TMUS) for a purchase price of $4.4 billion, including approximately $2 billion of assumed debt.

Shares of Norwegian Cruise Line Holdings (NCLH) are also likely to move to the upside after Mizuho upgraded its rating on the cruse operator's stock to Buy from Neutral.