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U.S. equity futures powered higher Thursday, setting up a fresh set of record highs for the major benchmarks, after a blowout set of first quarter earnings from Nvidia looks to drive tech-lead gains and extend the market’s surprising May rally.
Nvidia (NVDA) smashed Wall Street’s sales and earnings forecasts last night, posting net income of $15.24 billion on record revenues of just over $26 billion. It also boosted its regular dividend by 150% and unveiled plans for a 10-for-1 stock split in early June.
The group also forecast current quarter revenues in the region of $28 billion, suggesting robust demand for its AI-powering processors and boosting the value of rival chipmakers who are likely to grab a smaller share of the rapidly-expanding expanding market.
Nvidia $NVDA basically controlling the entire stock market pic.twitter.com/kHTLfUYzfh
— Barchart (@Barchart) May 23, 2024
Nvidia shares are likely to open north of the $1,000 mark for the first time on record, dragging the Nasdaq to a fresh all-time higher and lifting rivals such as Advanced Micro Devices (AMD) , Micron Technology (MU) and Broadcom (AVGO) firmly into the green.
The Nasdaq is set for a fresh all-time high following a blowout first quarter update from AI market leader Nvidia.
Away from tech, minutes of the Fed’s May policy meeting, published late Wednesday, suggested concern over the slow pace of inflation progress and hinted at the need for higher rates to achieve it.
Fed Chairman Jerome Powell, however, as well as other key members of the central bank’s rate-setting committee have pushed back on the idea of higher rates in recent weeks, putting the market’s on the new growth and inflation forecasts from next month’s meeting in Washington.
“Given Chairman Powell’s more dovish comments recently suggesting that the next policy move would most likely see an easing of rates, Fed speakers have made it decidedly clear they need to see a series of more favorable inflation-related data before they ease policy,” said LPL Financial’s chief global strategist Quincy Krosby.
Benchmark 2-year Treasury note yields were marked 2 basis points higher in the overnight session at 4.862% while 10-year notes were pegged at 4.418%.
The dollar index, meanwhile, fell 0.2% against a basket of its global currency peers to trade at 104.723 ahead of weekly jobless claims data at 8:30 am Eastern time and PMI activity data just after the opening bell.
Heading into the start of the trading day on Wall Street, the Nasdaq is set for a fresh record high with futures contracts suggesting a 165 point opening bell gain, powered in part by a 6.7% advance for Nvidia.
Futures contracts tied to the S&P 500 are priced for a 29 point advance while the Dow Jones Industrial Average is called 33 points higher.
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In overseas markets, Europe’s Stoxx 600 was marked 0.24% higher, with tech stocks leading the advance, while Britain’s FTSE 100 edged 0.02% higher in London.
Overnight in Asia, Japan’s Nikkei 225 snapped a two-day losing streak with a 1.26% gain as Nvidia’s blowout earnings lifted chip and tech stocks, while the region-wide MSCI ex-Japan benchmark slipped 0.19% into the close of trading.
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