The futures linked to the DOW JONES rose 0.12% to 38,883 points, while those of the S&P 500 advanced 0.46%, to 5,512 points. NASDAQ 100 futures advance 0.72% to 20,050 points.
Activity returns to Wall Street today after the market was closed yesterday for Juneteenth, a festival that commemorates the emancipation of slaves. The major New York indices are on track for a winning week after Tuesday the S&P 500 and the Nasdaq reached new all-time highs. The DOW JONES is also recovering from last week’s declines, although it is still far from reaching the 40,000 points it reached in mid-May.
On the macroeconomic agenda of the day, investors will learn shortly before the bell rings the usual weekly report on initial unemployment benefit claims, as well as housing construction data for May. The Philadelphia Fed manufacturing survey will also be released.
But beyond the references, it is the artificial intelligence fever that is giving fuel to Wall Street, especially with NVIDIA, which on Tuesday surpassed Microsoft as the most valuable company in the world after accumulate a spectacular revaluation of 174% so far this year. This Thursday, the value seems on track to continue its streak, with increases of 2.7% in the pre-opening.
NVIDIA already surpassed Apple in market capitalization in early June and has cemented its place as the de facto market leader at the forefront of the AI boom on Wall Street. Investors continue to pile into AI heavyweights even as consumers show signs of slowing spending and signal potential economic weakness. NVIDIA’s rally has rubbed off on chipmaker Broadcom, which is up more than 61% in 2024.
“Is it surprising that we continue to argue that Wall Street (i.e., S&P 500) is beating a different drum than Main Street (the foundation of the US economy)?” the head of US equity strategy asks in a note. of Citi, Scott Chronert, in a note on Tuesday. “Without a doubt, the influence of generative AI as an engine of continued incremental growth is permeating the US stock market environment right now.”
Still, some analysts are raising concerns that the lack of market breadth outside of the largest technology companies could worsen. “[El tema de la IA] It has a very similar feel to 2000-2001, but as we know, the market can remain irrational for longer than you can remain solvent,” warns Thomas Fitzpatrick, managing director of RJ O’Brien and associates. “The day of reckoning will come, but it is difficult to stand in the way of a speeding train.”
In other market names, Dell Technologies rises 3% in the pre-opening, while Super Micro Computer advances 3.2%. These advances come after Elon Musk announced on X (formerly Twitter) that both companies will provide server racks for the supercomputer that his startup xAI is building.
Hewlett Packard Enterprise is also headed for an upward journey. It does not seem to be affected by the fact that the UK Competition regulator announced yesterday that it was investigating whether the company’s planned $14 billion acquisition of Juniper Networks will raise competition concerns.
Regarding analyst recommendations, Enphase Energy shares fall 2.7% after JP Morgan has cut its price target to $124 per sharefrom the previous $128.
In fixed income, Bond yields rise this Thursday awaiting new statements from Fed members: Minneapolis Federal Reserve President Neel Kashkari, Richmond Federal Reserve President Thomas Barkin, and San Francisco Federal Reserve President Mary Daly are scheduled to appear today.
Money markets currently see a 66% chance that the Fed will cut interest rates in September, according to CME Group’s FedWatch tool.
The ten-year bond offers a yield in the secondary market of 4.254%, while the yield on the two-year bond climbs to 4.741%.
In raw materials markets, little change in oil prices, with West Texas futures rising a slight 0.06% to $80.76 a barrel, while European benchmark Brent scores 0. 26% to $85.29 per barrel.
The euro fell 0.14% in its exchange against the dollar, leaving the exchange rate at 1.0729 dollars for each single currency.
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