S&P 500 futures are up following yesterday’s first ATH since June; both tech and small caps are lagging, pointing to another potential broadening. A jump in US tech stocks is holding too, with Nasdaq-100 contracts rising after a 3.3% surge in the session before, powered by semiconductor stocks and blowout Palantir earnings.
S&P futures are up 0.4%, just shy of 7800, a new all time high, while Nasdaq futures underperform, rising 0.2%, as results from AMD and SpaceX failed to impress, sending shares in both lower in after-hours trading.
AMD’s forecast didn’t meet high expectations, while SpaceX investors focused on the hikes being made to its AI spending. Semis/memory are lower with some likely profit-taking after yesterday’s surge; NVDA/GOOG are leading Mag7 names higher as it appears that squeeze portion of this rally has room left to run, as JPM says keep an eye on IGV as the squeeze may turn into a narrative shift flipping one of the lightest owned sub-sectors into a leader in the near-term. Germany’s Infineon, up 69% this year, picks up the baton for European semiconductor sector results Wednesday.
Tuesday gains have fed into a bounce for the Kospi and Nikkei 225 in Asia. Euro Stoxx 50 futures are also up 0.4%.
The mood in stocks and in bonds has been bolstered by oil prices continuing to ease off, with Brent slipping below $79/bbl before rising above $80 as Houthi rebels threaten Saudi shipping north of the Red Sea and the UKMTO reported a ship sunk off Yemen after it was attacked by an unmanned craft. Qatar said a proposal had been drafted and both American and Iranian officials sounded hopeful about reopening the Strait of Hormuz.Treasury yields are dipping, while yields are down in Japan, Australia and New Zealand, the latter after weak quarterly jobs data.
The Bloomberg Dollar Spot Index is softer, with the Swiss franc and Swedish krona leading gains among major currencies and the kiwi the laggard. Asia FX is green across the board.Commodities are bid, led by Precious Metals; WTI seeing support around $75/bbl though that could change following the expected formal announcement of a new deal between the US and Iran.
Today's US economic data calendar includes July ADP employment change (8:15am), July final S&P Global US services PMI (9:45am) and July ISM services index (10am). Fed speakers scheduled include Cook (4:05pm) and Daly (8:35pm)In premarket trading, Nvidia leads Mag 7 stocks higher, poised to extend gains for a fifth consecutive session, after SPCX announced an exclusive partnership to build its future AI infrastructure entirely on NVIDIA’s platforms. Meanwhile, Tesla is underperforming the cohort as SpaceX’s debut earnings after IPO disappoints.
Other Mag 7 names are mostly higher (Nvidia +1.8%, Alphabet +1.2%, Apple +0.
9%, Amazon +0.7%, Meta +0.5%, Microsoft +0.
2%, Tesla -1.2%)AMD (AMD) falls 7% after the chipmaker’s third-quarter sales forecast underwhelmed investors expecting a stronger performance amid healthy demand.Arista Networks (ANET) jumps 12% after the cloud-networking company forecast better-than-expected revenue for the third quarter.
Analysts note that demand remains very healthy.Booking (BKNG) is up 7% after the online travel agency reported gross bookings for the second quarter that beat the average analyst estimate. The company said healthy global travel trends continued into the third quarter despite the ongoing conflict in the Middle East.
CVS Health (CVS) rises 3% after the health insurer boosted its adjusted earnings per share guidance for the full year.Digital Turbine (APPS) soars 27% after the mobile network company boosted its revenue guidance for the full year that topped the average analyst estimate and first-quarter results beat the consensus.Elanco Animal Health (ELAN) gains 6% after the animal health firm boosted its revenue and adjusted profit guidance for the full year, following better-than-expected results for the second quarter.
Everus Construction (ECG) climbs 9% postmarket after raising its year revenue and Ebitda outlook. Second-quarter results topped expectations, with revenue growing 34% from the year-ago period.Flutter (FLUT), the parent of the FanDuel, falls 5% after the company cut its US revenue guidance for the full year and appointed President Dan Taylor as chief executive officer from Oct.
1.Kratos (KTOS) gains 10% after the defense contractor boosted its revenue guidance for the full year, topping the average analyst estimate.Match Group (MTCH) drops 8% after providing a revenue forecast for the current quarter that narrowly missed analysts’ estimates, suggesting its dating sites still need to attract more younger users.
New York Times (NYT) falls 8% after the news company reported second-quarter results.Pinterest (PINS) drops 9% after the social media platform’s revenue outlook for the current quarter disappointed investors.Shopify (SHOP) climbs 28% after the e-commerce platform operator reported revenue for the second quarter that beat the average analyst estimate.
SpaceX (SPCX) falls 11% after it disclosed higher-than-expected spending on its artificial intelligence business, overshadowing an inaugural quarterly report that broadly surpassed Wall Street forecast.Other corporate news includes Paramount Skydance posting a surprise surge in profits with cost-cutting from its merger last year continuing to pay off. Lucid is targeting $1.
4 billion in cash savings this year, as the EV maker’s new CEO says “tough medicine” is needed to fix the troubled firm.Overnight, the micro highlight was SpaceX's first earnings report as a public company, which could have gone... better: shares are 10% lower in premarket trading after it disclosed higher-than-expected spending on its AI business, dampening a report that broadly surpassed forecasts.
Overall capex jumped to about $18.4 billion in the quarter, more than double its $7.8 billion revenue, and the company said the next two quarters of spending will be similar.
Meanwhile, Musk lived up to his reputation for making bold predictions, including that SpaceX would reach a $100 billion annual run-rate revenue by year’s end, and $1 trillion annual revenues by 2030. SpaceX also fleshed out its plans to take on AT&T, Verizon and T-Mobile by complementing its satellite-based internet service with land-based infrastructure (telecom stocks tumbled).The next catalyst for tech - and probably the entire market - comes in the form of results from memory chip makers Sandisk and Western Digital later.
Through Monday’s close, Sandisk has been the single best performing S&P 500 constituent year-to-date, and the 13th largest points contributor, while Western Digital also ranks highly on both measures. Last month’s heavy deleveraging means that fast-money actors like hedge funds have now covered a lot of their shorts, leaving the setup looking increasingly positive. At the same time, broadening has continued globally and a strong earnings season has accelerated the sector rotation that was already underway.
One way to see this week's euphoria: on Tuesday we saw the highest ever amount of S&P call futures bought.The recent correction in tech stocks has brought valuations to more reasonable levels, helping to restore investor confidence after a bout of volatility triggered losses at several hedge funds last month. The MSCI World Semiconductor Index had tumbled more than 20% from its peak in June, driven by worries around the sustainability of AI spending boom and progress in China’s advanced chipmaking.
The gauge has rebounded 15% since then.“Albeit there was some disappointment on the micro level, the numbers are still confirming that the overarching macro trend is intact as they confirm the durability of the compute build-out,” said Stephan Kemper, chief investment officer at BNP Paribas Wealth Management Germany. “Thus, tech as a whole can benefit even if single players suffer.
”Geopolitical tensions are easing as President Donald Trump said the US had “good” discussion