U.S. stock futures were poised to start Thursday's session in positive
territory as sentiment was lifted in after-hours trading by Nvidia's earnings.
The chip maker posted a blowout second quarter and its expectation for 70% revenue growth during fiscal 2028 signaled greater optimism on the durability of AI demand.
"For now, the company has proven that criticism of its investment and financing model for AI is overblown," XTB said.
The strength of the report reverberated across the globe, lifting AI-linked stocks in Europe as well as in Asia.
Ahead of the opening bell the Dow, S&P and Nasdaq were gaining as crude oil prices fell and Treasury yields were little changed.
Yields remained elevated across the board on both sides of the Atlantic, with investors awaiting signals from central bankers at the Jackson Hole symposium, which starts Thursday and will include a keynote speech by Federal Reserve Chairman Kevin Warsh on Friday.
Warsh's speech is seen as an early test of his communication strategy and credibility and he will need to strike a careful balance, Impax Asset Management said.
"A message perceived as too dovish could trigger further [Treasury] curve steepening, weigh on the dollar and support gold. Conversely, a more hawkish tone risks prompting markets to price a September rate hike."
Economic Insight
Syz Group said it doesn't expect a rate hike by the Fed at its meeting next month, even if investors will likely increase slightly their expectations for one.
"We stick for the moment to our outlook of no further Fed rate hike in the second half [of the year]."
Meanwhile, Deutsche Bank said the U.S. Treasury is expected to be more interventionist, pursuing incremental adjustments rather than dramatic changes to debt management, following its announcement it would double buying back long-end securities.
Stocks to Watch
Nvidia shares climbed 7.3% after it reported its second-quarter figures.
Micron Technology rose 4.1% and Salesforce gained about 12% on the back of Nvidia's earnings.
CrowdStrike increased 8.9% amid rising concern about the threat posed by hostile AI agents.
Watch For:
U.S. Weekly Jobless Claims; Canada Current Account; Royal Bank of Canada 3Q earnings; Toronto-Dominion 3Q earnings
Today's Top Headlines/Must Reads:
- U.S. and Canada Are Bracing for Prolonged Trade Dispute
- Runaway Drug Violence Sets Off a Political Earthquake in Costa Rica
- The Russia-Ukraine Air War Has Entered a New, Deadlier Phase
MARKET WRAPS Forex:
The dollar traded steady as investors waited to see whether Warsh provides a better understanding of the Fed's monetary policy.
The euro was flat against the dollar as crude oil prices remained contained. The risk of higher inflation and weaker growth in Europe continues to increase and could potentially weaken the euro against the dollar in coming weeks, MUFG said.
Bonds:
Treasury yields were little changed following Wednesday's key PCE inflation data.
"With core PCE holding at 3.3% year-on-year and the supercore re-accelerating, the pressure on [Fed Chairman Kevin] Warsh to signal a hawkish posture is real--but consensus remains that he will avoid a definitive policy commitment," Danske Bank said.
The 10-year Treasury might face an uphill battle to fall below 4.50% any time soon, ING said, adding that it expects the 10-year yield to settle between 4.50% to 5% for now.
"All things considered, if the buyback plan is there to bully long-end yields lower on a structural basis, there is a war to be fought ahead." Energy:
Oil prices retreated as analysts remained cautiously positive that talks between Oman and Iran could reopen the Strait of Hormuz. Brent and WTI crude for October delivery fell.
Metals:
New York gold futures traded flat at $4,654.70 a troy ounce in morning European trade. The market remains stuck between expectations of higher U.S. interest rates and worries over U.S. debt.
Copper moved slightly lower in morning European trade after the U.S. dollar strengthened, ANZ said, adding the market awaited an announcement from the White House on plans for tariffs on imported refined copper.
TODAY'S TOP HEADLINES
Salesforce Profit, Revenue Rise, Expands Partnership with Anthropic's Claude
Salesforce posted higher second-quarter profit and revenue on rising demand for its artificial-intelligence and data offerings, and also expanded its partnership with the AI company Anthropic.
The results prompted the enterprise software company to bump up its full-year sales and profit forecasts, factoring in a boost in organic growth as well as acquisitions it expects to close this quarter.
Ozempic maker Novo Nordisk downgraded to sell after 70% stock-price dive from peak
While Ozempic maker Novo Nordisk has fallen on tough times, Wall Street analysts have still been reluctant to advise investors to sell the stock, until Deutsche Bank lowered the boom on Thursday.
Analyst Emmanuel Papadakis cut his rating to sell from hold and cut the price target by 9%, to 265 kroner.
AI Startup DeepSeek Poised to Reach $74 Billion Valuation
DeepSeek is set to soon secure new funding that would value the Chinese artificial-intelligence startup at $74 billion, building its war chest as it targets an initial public offering next year.
The Hangzhou-based company is seeking to raise $7.4 billion to bankroll research and development, and its expansion into computing infrastructure, according to people familiar with the matter.
Thinking Machines Lab Co-Founder Barret Zoph Joins Google
Barret Zoph, the Thinking Machines Lab co-founder who abruptly defected to OpenAI this year amid a dispute with Chief Executive Mira Murati, has changed employers again.
Zoph, who served as chief technology officer at the startup and led a push to sell artificial-intelligence products to businesses at OpenAI, is joining Alphabet's Google as a vice president of research, the company said.
Think Treasurys Are Having a Rough Summer? It's Even Uglier Abroad.
The selloff in U.S. Treasurys has captured global attention, but bond markets overseas have been getting hit even harder.
The jump in U.S. borrowing costs-and Treasury Secretary Scott Bessent's intervention to bring them back down-has shone a spotlight not just on America's growing debt problem but the world's.
Bank Lending to Eurozone Businesses Fell Again in July
Lending to eurozone businesses fell in July, a sign that rising borrowing costs might be weakening the currency area's economy ahead of a meeting of the European Central Bank, which is expected to again raise its key interest rate.
The ECB on Thursday said that bank loans to businesses totaled 22 billion euros ($25.64 billion) during the month, down from 27 billion euros in June and 34 billion euros in May.
Forget the VIX-Bond Yields Are the Market's New Fear Index
Treasury yields are acting as Wall Street's new "fear gauge," supplanting traditional risk measures as investors parse the impact of a host of fiscal, monetary, and geopolitical issues that are piling up into the final months of the year.
This change of focus for rates-from mostly expressing views on growth and inflation to warning about issues including fiscal largess, artificial-intelligence investments, global oil prices, and election risks-represents a key change for investors.
Reality Dawns That RBA Has Further Work to Do in Taming Inflation
SYDNEY-Reality is starting to dawn on Australian financial markets that the Reserve Bank of Australia has more work to do in terms of raising interest rates and the next increase could be just weeks away.
A sense of calm had settled on markets a month ago, with many economists appearing content that the RBA had done enough after raising the official cash rate three times in quick succession at the start of the year to combat stubborn inflation pressures and the flow-on effects of soaring fuel prices.
CIA Chief's Surprise Moscow Trip Was to Warn Russia Not to Attack NATO
The surprise visit by the director of the Central Intelligence Agency to Moscow this week was to deliver a warning to Russia not to attack NATO countries, according to people briefed on the visit.
The trip was spy-agency chief John Ratcliffe's first publicly known visit to the Russian capital. It followed new U.S. intelligence assessments, reported earlier by The Wall Street Journal, that Russian President Vladimir Putin could try to test the resolve of the North Atlantic Treaty Organization with a limited assault on an allied country in the next few years.
More Than 1,400 Missing in Nepal and China in Floods Likely Sparked by Glacier Break
Nepal and China said that around 1,400 people remain missing and at least 180 were confirmed dead from tsunami-like floods likely sparked by the partial collapse of a Himalayan glacier into a valley below.
Floodwaters tore through towns and villages and engulfed Gyirong Port, the major land crossing between China and Nepal, in a wall of water and mud. The avalanche triggering the floods was so powerful that the U.S. Geological Survey initially recorded it as an earthquake, before later recategorizing it.
Write to pierre.bertrand@wsj.com
TODAY IN CANADA 3Q Earnings:
Canadian Imperial Bank of Commerce Royal Bank of Canada Toronto-Dominion Bank
Economic Indicators (ET):
0830 2Q Current Account Balance of Payments
0830 June Payroll employment, earnings and hours, and job vacancies
Stocks to Watch:
Corby Spirit and Wine 4Q Adj Net Income CAD 7.4M; Adj EBITDA CAD 14.7M; Operating Income CAD 10.9M; Net Income CAD 6.5M; Basic EPS CAD 0.23; Adj Operating Income CAD 11.8M; Revenue CAD 71.1M
Other News:
0830 Canadian Finance Minister François-Philippe Champagne meets Indian Finance Minister Nirmala Sitharaman
Comments