AI-Linked Stocks Drive S&P 500 and Dow to Record Highs Amid Strong Earnings Season

Nasdaq futures underpinned by strong AI forecasts; focus on earnings, data

Aug 4 (Reuters) - Nasdaq futures rose on Tuesday after strong forecasts from Palantir and ON Semiconductor reassured investors about AI-driven demand, while Middle East developments and U.S. earnings were also in focus to gauge the health of corporate America. Palantir Technologies (PLTR.O), opens new tab gained 17.2% in premarket trading after raising its annual revenue forecast again, signaling strong government and commercial demand for its AI-powered data analytics software. Chipmaker On Semiconductor (ON.O), opens new tab added 7.5% after forecasting quarterly revenue above expectations, betting on surging demand for power management chips used in AI data centers. Investors have been scrutinizing results from AI-linked companies this earnings season for signs that their billion dollar investments are yielding returns. Strong results from AI leaders Microsoft (MSFT.O), opens new tab and Amazon (AMZN.O), opens new tab last week were a relief and ⁠have underpinned gains on Wall Street since then. The benchmark S&P 500 (.SPX), opens new tab is about 21 points from hitting its first record high since June, while the blue-chip Dow (.DJI), opens new tab closed at a record high on Monday for the first time since July. Other AI-linked stocks such as Micron (MU.O), opens new tab added 2.3%, Nvidia (NVDA.O), opens new tab rose 0.7% and Marvell (MRVL.O), opens new tab rose 4.4%. At 05:16 a.m. ET, Dow E-minis were up 34 points, or 0.06%, and S&P 500 E-minis were up 5 points, or 0.07%. Nasdaq 100 E-minis were up 129.25 points, or 0.45%. Overall, this earnings season has so far been better than historical standards. Of the 304 companies in the S&P 500 that have reported second-quarter earnings as of Friday, 85.2% have beaten estimates, versus the long-term average of 67.5%. Snap (SNAP.N), opens new tab jumped 8.1% after beating second-quarter revenue estimates, thanks to increased advertising spending during the FIFA ⁠World Cup and stronger campaign activity from large advertisers in North America. Big names that are due to report on Tuesday include drug makers Merck (MRK.N), opens new tab and Pfizer (PFE.N), opens new tab, global economy bellwether Caterpillar (CAT.N), opens new tab, Marathon Petroleum (MPC.N), opens new tab and fast-food giant McDonald's (MCD.N), opens new tab. McDonald's results will be landing at a time when a cyclosporiasis outbreak potentially linked to lettuce has grown into the largest on record in the country, with Michigan hit hardest. Elon Musk's SpaceX (SPCX.O), opens new tab will release its first earnings report since its public debut after ⁠markets close. Shares were up 1%. ECONOMIC DATA The focus later in the day will shift to economic data. The Labor Department's Job Openings and Labor Turnover Survey, scheduled at 10 a.m. ET, is expected to show the economy created about 7.4 million jobs in June, lower than the 7.6 million in the ⁠month before. Other reports on factory orders and trade for June, along with remarks by Kansas City Fed President Jeffrey Schmid could also offer insights on the health of the economy. Investors will parse the reports to also gauge the outlook for interest rates at a time ⁠when the U.S.-Iran standoff in the Middle East is keeping crude prices elevated, while the Federal Reserve has offered little guidance on monetary policy. Traders see a 63.4% chance that the central bank will hike rates by at least 25 basis points when it meets next month, the CME FeWatch Tool showed. Reporting by Johann M Cherian in Bengaluru; Editing by Devika Syamnath Our Standards: The Thomson Reuters Trust Principles., opens new tab

S&P, Dow futures steady as MidEast deal in focus; chip, software stocks tumble

Aug 6 (Reuters) - S&P 500 and Dow futures were steady on Thursday after this week's record-breaking rally as investors awaited details on a Middle East peace deal, while Nasdaq futures slipped as strong forecasts from Western Digital and Sandisk failed to impress. Data storage company Western Digital lost 15.5% and memory chip maker Sandisk dropped 10.1% in premarket trading, after having shot up 200% and 400% this year. Both companies forecast quarterly revenue above expectations, betting on strong AI-driven demand. "Expectations (for Western Digital) got priced for outright acceleration (not just continued strength)," said Luke Lango, chief technology analyst at financial research firm InvestorPlace. "When the growth and margin trajectory came in 'merely' excellent rather than re-accelerating, an extremely crowded, high-momentum stock got dumped alongside the broader AI-memory complex that's been unwinding all week." Shares of other chip stocks such as Micron shed 4.6%, while Advanced Micro Devices, Marvell Technology and Intel lost over 1% each. Software stocks were also broadly lower, with Atlassian, Salesforce, Adobe and Zscaler all down sharply following earnings reports from a few companies in the sector. AppLovin dropped 18.7% as the marketing platform missed Wall Street estimates for quarterly revenue, while cloud security firm Datadog lost 22.3% after reporting second-quarter results. Megacaps such as Meta and Amazon were marginally higher, while Alphabet was up about 0.5%, a day after dropping 4% on an announcement about a leadership overhaul of its AI division. Apple rose 0.8%. SpaceX rose 1.5% ahead of the space conglomerate's first post-IPO share lockup expiry. The broader AI-linked group of stocks showed signs of cooling from a rally. Strong earnings from tech leaders this reporting season have restored investor confidence that AI investments were being monetized, which helped the benchmark S&P 500 and the blue-chip Dow reclaim record highs earlier this week. The Nasdaq is about 3% away from an all-time high, bouncing off last week's lows, which saw the index coming close to confirming a correction. At 7:05 a.m. ET, Dow E-minis were up 124 points, or 0.23%, S&P 500 E-minis were up 4.5 points, or 0.06%, and Nasdaq 100 E-minis were down 225.25 points, or 0.76%. Brent crude prices traded in a tight range near $80 a barrel as markets were keen on any signs of a deal between Iran and the U.S. A proposed deal between Iran and Oman would give Tehran control over ships entering the Gulf through the Strait of Hormuz, sources told Reuters. The Federal Reserve has been keen on the outlook for energy costs, with most central bankers voicing that they were prepared to act if price pressures increase. St. Louis Fed President Alberto Musalem is expected to speak on monetary policy later in the day. With Chairman Kevin Warsh staying mum on forward guidance, traders are struggling to gauge the central bank's next policy move. Probabilities for no change versus a rate hike in September are now closer to even, the CME FedWatch Tool showed. Last week, traders were pricing in a 37% chance for rates staying unchanged versus 63% for a rate increase. A weekly jobless claims report is due later in the day, heading into the non-farm payrolls figures for July due on Friday. Among other stocks, Moderna rose 3.9% after the U.S. Food and Drug Administration approved the company's flu vaccine for people aged 50 and older. (Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Devika Syamnath and Maju Samuel) By Johann M Cherian and Shashwat Chauhan

S&P 500, Dow at record highs as Mideast hopes offset SpaceX, AMD drag

Aug 5 (Reuters) - The S&P 500 and the Dow traded at all-time highs on Wednesday, as hopes of a Middle East peace breakthrough offset the slide in shares of SpaceX and AMD after the upbeat forecasts issued by the companies failed to impress investors. Elon Musk-led SpaceX's revenue nearly doubled and operating losses narrowed in its first earnings report since going public, fueled by its booming Starlink satellite communications and AI businesses. But the rocket company's shares slid 12.5% in early trading after executives flagged the spending spree underpinning its lofty ambitions was far from over. Shares could face additional pressure from the expiry of the stock's post-IPO lock-up period starting on Thursday. Musk's other company, Tesla, slipped 1.6%. "This is the culmination of the story of this entire earnings season. SpaceX beat analysts' expectations on revenue, but spending on AI is getting out of hand, with no signs of slowing down anytime soon," said Nic Puckrin, cross-asset analyst and founder of Coin Bureau. Advanced Micro Devices forecast quarterly revenue above estimates, reflecting strong AI demand. However, shares slipped 6.5%, suggesting investors were looking for a stronger outlook to justify the stock's 142% jump this year. Rival Nvidia's shares, which have lagged AMD this year, rose 3.4%, also underpinned by SpaceX's plans to use the company's hardware exclusively to build its data centers. Most megacap stocks gained, with Microsoft and Alphabet up about 1% each. Seven of the 11 S&P sectors were trading higher, with healthcare leading gains with a 1.9% rise. Utilities lagged with a near 1% fall. Wednesday's moves built on Wall Street's rally spanning the past few sessions that took the benchmark S&P 500 and the blue-chip Dow to record highs as confidence in AI-related stocks flourished. At 9:34 a.m. ET, the Dow Jones Industrial Average rose 450.80 points, or 0.83%, to 54,536.68, the S&P 500 gained 46.98 points, or 0.61%, to 7,783.50. The Nasdaq Composite gained 109.43 points, or 0.41%, to 26,694.42, hitting its highest in over a month. Investors also weighed a slew of earnings from other sectors. Drugmaker Eli Lilly was up 7.3% after raising its full-year revenue forecast, while Disney rose 2.9% after beating third-quarter profit expectations. Arista Networks jumped 7.3%, as the networking equipment maker forecast third-quarter revenue above estimates. Uber lost 5.5% after forecasting current-quarter adjusted earnings below estimates. On the data front, U.S. private payrolls growth slowed in July, as per the ADP national employment report. The bigger focus will be on the official non-farm payrolls figures on Friday. Data has broadly reflected robust economic performance, but with Middle East tensions keeping energy costs elevated and the Federal Reserve offering no forecasts on monetary policy, uncertainty persists. Minneapolis Fed President Neel Kashkari in an interview with CNBC said he believed now is the time to start slowly moving interest rates higher. At least two more top Fed officials are expected to speak later in the day. Advancing issues outnumbered decliners by a 1.26-to-1 ratio on the NYSE and by a 1.13-to-1 ratio on the Nasdaq. The S&P 500 posted 22 new 52-week highs and one new low, while the Nasdaq Composite recorded 52 new highs and 25 new lows. (Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Devika Syamnath and Maju Samuel) By Johann M Cherian and Shashwat Chauhan

Dow, S&P 500 close at record on AI-linked earnings, Mideast deal hopes

NEW YORK, Aug 4 (Reuters) - The S&P 500 and the Dow closed at record highs on Tuesday, powered by the latest batch of earnings from AI-related companies such as Caterpillar and Palantir that assuaged demand concerns, while crude prices and Treasury yields dropped on hopes for a deal in the Iran war. Palantir Technologies soared nearly 30% and recorded its biggest daily percentage gain since February 2024, after raising its annual revenue forecast. Caterpillar, seen as a bellwether for the global industrial economy, jumped after raising its annual revenue growth forecast, as the buildout of AI data centers has fueled demand for its power-generation and construction equipment. The move in Caterpillar made it the biggest boost to the Dow Industrials, accounting for more than 300 points to the upside for the venerable average. Investors have been closely monitoring results from AI-linked companies this earnings season for any signs the massive spending in the space will be justified. OIL PRICES DROP ON IRAN DEAL HOPES Also supporting stocks was a drop of about 5% in crude prices after a Qatari official said efforts to secure a diplomatic resolution to the conflict were continuing, while U.S. Treasury Secretary Scott Bessent said a deal with Iran to reopen the Strait of Hormuz could come within the next two days. The tumble in oil prices also dented expectations for a rate hike from the Federal Reserve at its September meeting down to 56.9% from 67.2% in the prior session, according to CME FedWatch, which contributed to a retreat in U.S. Treasury yields. "I don't sense one ounce of skepticism among investors, from oil to interest rates to equities," said Jack Ablin, chief investment strategist and founding partner at Cresset Capital Management in Chicago. "The earnings reports were certainly supportive, and that's great news, but I'm not sure a handful of earnings reports justifies new records in the S&P." MAJOR AVERAGES SURGE HIGHER According to preliminary data, the S&P 500 gained 137.20 points, or 1.81%, to end at 7,737.70 points, while the Nasdaq Composite gained 668.10 points, or 2.58%, to 26,581.99. The Dow Jones Industrial Average rose 912.25 points, or 1.72%, to 54,090.66. The Dow recorded a closing high for a second straight day after notching its first since July 6 on Monday, while the S&P 500 on Tuesday secured its first closing record since July 2. Chip stocks, also seen as beneficiaries of AI-spending, surged. The Philadelphia Semiconductor index shot up nearly 7% and rose for a fourth straight session after tumbling 20.6% in July. The S&P 500 tech sector gained as the best performing of the 11 major S&P sectors. Results from corporate earnings this quarter have mostly been robust. Of the 304 companies in the S&P 500 that have reported second-quarter earnings as of Friday, 85.2% have beaten estimates, versus the long-term average of 67.5%, according to LSEG data, with every major S&P sector showing profit growth. Elon Musk's SpaceX will release its first earnings report since its public debut after markets close. The company's shares jumped before the announcement. McDonald's advanced despite reporting disappointing results, while Pfizer gained after reporting upbeat quarterly results. On the data front, job openings dropped in June, weighed down by a sharp decline in the healthcare and social assistance sector, but a rise in hiring and low layoffs suggested the labor market remained stable. The data is the first in a series of reports on the labor market this week that will culminate in Friday's government payrolls report. (Reporting by Chuck Mikolajczak; reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Additional reporting by Niket Nishant; Editing by Devika Syamnath, Maju Samuel and Aurora Ellis) By Chuck Mikolajczak and Johann M Cherian

US stock futures advance as strong AI-linked earnings continue

Aug 4 (Reuters) - U.S. stock index futures rose on Tuesday after strong forecasts from Palantir and ON Semiconductor reassured investors about AI-driven demand, while Middle East developments and U.S. earnings were also in focus to gauge the health of corporate America. Palantir Technologies gained 16% in premarket trading after raising its annual revenue forecast again, while chipmaker On Semiconductor added 7.6% after forecasting quarterly revenue above expectations. Caterpillar jumped 7.5% after the company, seen as a bellwether for the global industrial economy, reported a second-quarter profit that nearly doubled from a year earlier. Investors have been scrutinizing results from AI-linked companies this earnings season for signs that their billion-dollar investments are yielding returns. Strong results from AI leaders Microsoft and Amazon last week were a relief and have underpinned gains on Wall Street following a turbulent July. "Momentum-driven sectors often overshoot in both directions. But it is important not to confuse a momentum unwind with a fundamental deterioration," said Brian Levitt, chief global market strategist at Invesco. The benchmark S&P 500 is about 21 points from hitting its first record high since June, while the blue-chip Dow closed at a record high on Monday for the first time since July. At 6:56 a.m. ET, Dow E-minis were up 343 points, or 0.64%, S&P 500 E-minis were up 15.5 points, or 0.2%, and Nasdaq 100 E-minis were up 225 points, or 0.78%. Other AI-linked stocks such as Micron added 3.5%, Nvidia rose almost 1% and Marvell climbed 8.5%. Overall, this earnings season has so far been better than historical standards. Of the 304 companies in the S&P 500 that have reported second-quarter earnings as of Friday, 85.2% have beaten estimates, versus the long-term average of 67.5%. Elon Musk's SpaceX will release its first earnings report since its public debut after markets close. Shares were up 1.3%. Snap jumped 6.8% after beating second-quarter revenue estimates, thanks to increased advertising spending during the FIFA World Cup and stronger campaign activity from large advertisers in North America. Shares of U.S. photonic firms Coherent and Lumentum added 11.8% and 9.3%, respectively, after Reuters reported the Trump administration is drafting a ban on U.S. imports of new models of Chinese data center components. ECONOMIC DATA The focus later in the day will shift to economic data. The Labor Department's Job Openings and Labor Turnover Survey, scheduled at 10 a.m. ET, is expected to show the economy created about 7.4 million jobs in June, lower than the 7.6 million in the month before. Other reports on factory orders and trade for June, along with remarks by Kansas City Fed President Jeffrey Schmid, could also offer insights on the health of the economy. Investors will parse the reports to also gauge the outlook for interest rates at a time when the U.S.-Iran standoff in the Middle East is keeping crude prices elevated, while the Federal Reserve has offered little guidance on monetary policy. Traders see a 63.4% chance that the central bank will hike rates by at least 25 basis points when it meets next month, the CME FedWatch Tool showed. (Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Additional reporting by Niket Nishant; Editing by Devika Syamnath and Maju Samuel) By Johann M Cherian and Shashwat Chauhan