Rising optimism about a pause in interest rate hikes in September lifted U.S. index futures on Thursday, while investors readied for Arm Holdings Plc's stock market debut following the biggest U.S. IPO since 2021.
Shares of Arm Holdings will make their widely anticipated debut on the Nasdaq after the chip designer notched a $54.5 billion valuation in its offering, priced at $51 per share, on Wednesday.
Market Snapshot
At 8:35 a.m. ET, Dow e-minis were up 119 points, or 0.34%, S&P 500 e-minis were up 21 points, or 0.46%, and Nasdaq 100 e-minis were up 80.25 points, or 0.52%.
Inflation at the wholesale level rose more than expected in August, countering recent data showing that price increases have tempered lately.
The producer price index, a measure of what producers get for their goods and services, increased a seasonally adjusted 0.7% in August and 1.6% on a year-over-year basis. That monthly gain was above the Dow Jones estimate for a 0.4% increase.
Pre-Market Movers
Grab has partnered with crypto giant Circle to pilot Web3 customer experiences in Singapore through the integration of Circle's new Web 3 Services platform in the Grab app. Stocks rebounded over 1% in premarket trading.
AMC gained over 5% in premarket trading as it raised about $325.5 million through the sale of 40 million shares, a move that it said would address a cash crunch as the movie-theater industry rebounds.
Ford (ticker: F) was up 0.2% and General Motors (GM) rose 0.7% ahead of a deadline late Thursday for a strike by the United Auto Workers union. Shawn Fain, the head of the UAW, said late Wednesday the union and the Big Three automakers, including Stellantis (STLA), were still “very far apart” on the union’s key priorities for wage increases, and that the UAW was preparing to strike all three companies using new tactics after 11:59 p.m. on Thursday.
The initial public offering of Arm Holdings was priced at $51 a share, at the top of the expected range, giving the chip design company a valuation of $54.5 billion on a fully diluted basis. Arm shares will begin trading Thursday on the Nasdaq under the stock symbol “ARM.” Ahead of Arm’s debut, shares of fellow chip makers traded higher. Nvidia (NVDA) rose 1.2%, U.S.-listed shares of Taiwan Semiconductor Manufacturing (TSM) gained 1.1%, Intel (INTC) was up 0.7%, and Qualcomm (QCOM) rose 0.6%.
Norwegian Cruise Line (NCLH) and Carnival (CCL) were upgraded to Buy from Neutral at Redburn. Norwegian shares rose 2% in premarket trading and Carnival was up 1.9%. The Redburn analysts maintained their recommendation on Royal Caribbean (RCL) at Neutral. Royal Caribbean gained 1%.
HP Inc. (HPQ) was down 1.7% after Warren Buffett’s Berkshire Hathaway (BRK.B) disclosed it sold 5.5 million shares of the maker of personal computers and printers. It was the first sale of stock in HPInc. since Berkshire Hathaway accumulated a 12% stake in the company in the early part of 2022.
Etsy (ETSY) rose 3.6% to $66.89 after the online marketplace was upgraded to Outperform from Peer Perform at Wolfe Research with a price target of $100.
First Solar (FSLR) gained 2.7% in premarket trading after the solar technology company was upgraded to Outperform from Market Perform at BMO Capital. The stock fell 5.8% on Wednesday.
Carrier Global (CARR) declined 2% after the maker of heating, ventilation and air conditioning products was downgraded to Neutral from Buy at Mizuho.
Semtech (SMTC), the semiconductor supplier, forecast a fiscal third-quarter loss of 9 cents to 22 cents a share on revenue of $190 million to $210 million. Analysts had been estimating adjusted earnings of 12 cents a share on revenue of $247.7 million. The stock, however, was rising 2% in premarket trading after falling earlier in the session.
Earnings reports are expected after the closing bell Thursday from software company Adobe (ADBE), home builder Lennar (LEN), and online auto auctioneer Copart (CPRT).
Market News
SoftBank-Backed Arm Set to Debut on Nasdaq
Arm Holdings Plc priced its initial public offering at the top end of its range to raise $4.87 billion in the largest listing of the year, one that could give a major lift to long-suffering equity markets.
The chip designer, which is owned by SoftBank Group Corp., sold 95.5 million American depositary shares for $51 apiece. Arm had marketed the shares for $47 to $51 each.
Wedbush's Dan Ives Says Apple's Market Cap Is About to Shoot up
Wedbush lifted its price target on Apple to $240 from $230 and reiterated its ‘outperform’ rating as it reckons the iPhone 15 launch upgrade cycle will surprise to the upside.
Calling the dip a "knee-jerk reaction," Ives maintained that the unveiling was a "flex the muscles moment" for Apple, featuring Cupertino's growing pricing power in the midst of a "mini super cycle that's going to play out despite many of the bears' skepticism building."
U.S. Crude-Oil Benchmark Presses Toward $90 a Barrel
The U.S. crude-oil benchmark was approaching the $90-a-barrel threshold for the first time since November early Thursday, lifted by continued concerns over the outlook for tight global crude supplies.
West Texas Intermediate crude for October delivery rose $1.16, or 1.3%, to $89.68 a barrel on the New York Mercantile Exchange.
November Brent crude, the global benchmark, was up $1.14, or 1.2%, at $93.02 a barrel on ICE Futures Europe.
Yum China Rallies After Targeting $3B in Capital Allocation to Shareholders
Yum China Holdings updated its guidance and outlined the company's broad strategies at its Investor Day event on Thursday in Xi'an, China. Shares of Yum China shot up 3.25% in premarket trading on Thursday.
At the event, Yum China's CEO Joey Wat, CFO Andy Yeung, and members of the management team formally launched the restaurant operator's refreshed RGM 2.0 strategy. Presentations also highlighted Yum China's (YUMC) strategic initiatives to accelerate network expansion, drive sales growth and boost profits.
