U.S. stock index futures have shown positive movement as optimism regarding Nvidia’s upcoming earnings report continues to bolster megacap growth stocks. Additionally, the decline in yields on longer-dated government bonds has provided some support to the equities market.
Following a week of substantial losses driven by concerns about rising interest rates and surging Treasury yields, U.S. equities are regaining some ground. Nvidia’s rally, along with other tech stocks, ahead of the chip designer’s second-quarter earnings report has contributed to this recovery. Nvidia’s shares climbed 1.7% in premarket trading, building on a nearly 9% gain from the previous session.
Other major technology and growth stocks, including Tesla, are also experiencing gains. Tesla, in particular, advanced 3.4% after recording its most significant one-day percentage gain since March.
Investors are eagerly awaiting Nvidia’s earnings results to see if they match the heightened market expectations following the company’s blockbuster report in the previous quarter. These expectations had fueled a surge in tech stocks, driven by the excitement surrounding artificial intelligence advancements.
The easing of yields on the 10-year Treasury note from a 15-year high of 4.35% is contributing to the positive sentiment. This decline in bond yields comes as some pressure is lifted off equities, following a recent bond market sell-off driven by evidence of a strong U.S. economy, which reduced hopes of the Federal Reserve easing monetary policy in the near term.
The upcoming central bankers’ meeting at Jackson Hole, starting on Thursday, will be closely monitored by investors for further insights into the direction of U.S. interest rates. Fed Chair Jerome Powell’s speech at the meeting is anticipated to be a significant focus point on Friday.
Traders’ predictions regarding a pause in rate hikes next month are at 86.5%, while the odds of a 25 basis point rate hike in November have risen to nearly 39%, according to CME Group’s FedWatch tool.
The equities market is also influenced by quarterly results from consumer goods companies. Lowe’s Cos saw a 3.2% rise after exceeding profit estimates, Macy’s experienced a 4% jump after beating second-quarter sales estimates, and Coty slipped 2.0% after forecasting annual profit below Wall Street expectations.
In the premarket hours, Dow e-minis were up 66 points (0.19%), S&P 500 e-minis were up 17.25 points (0.39%), and Nasdaq 100 e-minis were up 79 points (0.53%). Additionally, Zoom Video Communications shares rose 2.8% after the platform forecasted third-quarter profit above Wall Street estimates, and Activision Blizzard gained 1.3% after Microsoft offered to sell “Call of Duty” maker’s non-European streaming rights to Ubisoft Entertainment to navigate regulatory hurdles.