S&P 500 and Nasdaq Rally on Chip Sector Surge and Fed Rate Cut Signals

S&P 500, Nasdaq boosted by chip rally, Fed rate cut signals

The S&P 500 and Nasdaq reported their largest gains since February, buoyed by a chip stock rally. The Federal Reserve kept interest rates steady but hinted at potential easing in September. Technology stocks led market advancements. Nvidia's shares surged after a positive AI forecast by AMD, boosting the semiconductor sector.The S&P 500 and Nasdaq scored their biggest daily percentage gains since Feb. 22 and the Dow rose on Wednesday as chip stocks rallied and the Federal Reserve kept U.S. interest rates unchanged while signaling possible easing in September if inflation cools. Seven out of the 11 S&P 500 sectors advanced, led by technology and consumer discretionary stocks. Healthcare, real estate and consumer staples were the weakest. The Fed kept its benchmark overnight interest rate in the 5.25%-5.50% range as it ended its two-day policymaking meeting on Wednesday, but opened the door to easing in September, seven weeks shy of the November U.S. elections. The benchmark U.S. 10-year note yield fell 9.8 basis points to 4.043%. The Dow Jones Industrial Average rose 0.24% to 40,842.79, the S&P 500 gained 1.58% to 5,522.30 and the Nasdaq Composite advanced 2.64% to 17,599.40. "It was the worst kept secret on the planet that the Fed was not going to cut in July," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. "The Fed is going to have its day in the sun in September with a 25 or 50 basis point cut, but I would not be surprised if that is already priced into stocks." During his press conference, Fed Chair Jerome Powell said policymakers discussed the case for cutting rates, but a "strong majority" agreed that now was not the appropriate time. "The statement didn't move the needle at all," said Mark Malek, chief investment officer at Siebert Next in New York, referring to the Fed's official statement. "But listening to him speak, it's clear they're all locked and loaded for September rate cut and they're going to maintain their optionality." Data released early Wednesday showed July U.S. private payrolls increased far less than expected, indicating an easing in persistent labor market tightness. For the month, the S&P 500 climbed 1.1%, the Dow jumped 4.4%, while the Nasdaq lost 0.8%. Nvidia jumped nearly 13%, helped by a rosy 2024 sales forecast for artificial intelligence chips by peer Advanced Micro Devices, whose shares also gained 4.3%. The Philadelphia SE Semiconductor index rose finished up nearly 7%. U.S. President Joe Biden's administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the matter told Reuters. Microsoft dipped 1% after it posted massive AI-related expenses. Meta jumped 5% after the bell as its earnings beat market expectations. Apple and Amazon.com , which will report earnings on Thursday, closed up 1.5% and 2.9%, respectively. Advancing issues outnumbered decliners by a 2.23-to-1 ratio on the NYSE. On the Nasdaq, 2,603 stocks rose and 1,648 fell as advancing issues outnumbered decliners by 1.58-to-1. The S&P 500 posted 68 new 52-week highs and one new low while the Nasdaq Composite recorded 168 new highs and 104 new lows. Total volume on U.S. exchanges was 13.3 billion, compared with the 20-day moving average of 13.27 billion.

Nasdaq, S&P 500 ride chip-stock wave before Fed decision; Microsoft falters

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.) * US private payrolls miss expectations in July - ADP The Nasdaq and the S&P 500 jumped around 2% on Wednesday, as investors hoped for hints from the Federal Reserve on the timing of rate cuts, a bullish forecast from AMD boosted chip stocks and Microsoft slipped after a higher spending forecast. Both the S&P 500 and the Nasdaq hit one-week highs and were on track to log their biggest one-day gains since February. Advanced Micro Devices climbed 5% after lifting its 2024 forecast for AI-chip sales, helping Nvidia jump 12%. The Philadelphia SE Semiconductor index rose 5%, set for its biggest one-day gain since May 2023, but on track for its worst month since October 2023 after the recent chip stocks rout. "In many cases, chip stocks are overvalued at this point. There may be some room for them to run here, but then again they're not going to be able to maintain that pace," said Paul Nolte, senior wealth adviser and market strategist for Murphy & Sylvest. on the Biden administration's plans to expand U.S. powers to stop exports of semiconductor manufacturing equipment to Chinese chipmakers. Microsoft lost 1.3% on plans to spend more this fiscal year to build its AI infrastructure - another sign that the payoff from hefty investments in the technology could take longer than hoped. Among megacaps, Meta jumped 2% ahead of its results, due after markets close. Apple and Amazon.com , which will report earnings on Thursday, gained 1.7% and 3%, respectively. The S&P 500 Technology index jumped 3%, leading broad-based sectoral gains. At 12:03 p.m., the Dow rose 240.67 points, or 0.59%, to 40,984.00, the S&P 500 gained 88.78 points, or 1.63%, to 5,525.22 and the Nasdaq Composite gained 425.90 points, or 2.48%, to 17,573.31. Wall Street's fear gauge dipped to a one-week low, signaling improved investor sentiment. Tech and chip stocks took a hit this month after prompting a record-breaking Wall Street run in 2024, on enthusiasm surrounding AI adoption and the prospect of early interest-rate cuts. Results from Alphabet, Tesla and Microsoft failed to thrill. Investors are questioning if the AI-driven rally has run its course and are rotating to underperforming sectors. The small-caps Russell 2000 index and the blue-chip Dow are on track for their best month this year. Helped by the day's gains, the S&P 500 was on track to a monthly advance, while the Nasdaq recouped most of the ground it lost this month. All eyes are on the Fed's decision and commentary on rates later in the day. The central bank is expected to hold rates steady and open the door for a September rate cut. With traders fully pricing in a September cut, according to CME's FedWatch, any disappointment on this front could amplify the recent equity selloff, analysts fear. in July, but that might not be a true reflection of the labor market, which continues to moderate gradually. Among others, Boeing climbed 3% after naming aerospace industry veteran Kelly Ortberg its new president and CEO, while Mastercard gained 3% after upbeat second-quarter profit. Advancing issues outnumbered decliners by a 3.13-to-1 ratio on the NYSE, and by a 1.93-to-1 ration on the Nasdaq. The S&P 500 recorded 58 new 52-week highs and one new low, while the Nasdaq posted 85 new highs and 79 new lows. (Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Saumyadeb Chakrabarty)

S&P 500, Nasdaq rise on chip sector rally, Fed signals of upcoming rate cut

NEW YORK, July 31 (Reuters) - The S&P 500 and Nasdaq finished higher on Wednesday as chip stocks rallied and the Federal Reserve left U.S. interest rates unchanged but indicated it could begin easing monetary policy in September if inflation cools. The Fed kept its benchmark overnight interest rate in the 5.25%-5.50% range as it ended its two-day policymaking meeting on Wednesday, but opened the door to easing in September, seven weeks shy of the November U.S. elections. According to preliminary data, the S&P 500 gained 85.84 points, or 1.58%, to end at 5,522.28 points, while the Nasdaq Composite gained 451.98 points, or 2.64%, to 17,599.40. The Dow Jones Industrial Average rose 99.73 points, or 0.24%, to 40,843.06. "It was the worst kept secret on the planet that the Fed was not going to cut in July," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. "The Fed is going to have its day in the sun in September with a 25 or 50 basis point cut, but I would not be surprised if that is already priced into stocks." During his press conference, Fed Chair Jerome Powell said policymakers discussed the case for cutting rates, but a "strong majority" agreed that now was not the appropriate time. "The statement didn't move the needle at all," said Mark Malek, chief investment officer at Siebert Next in New York, referring to the Fed's official statement. "But listening to him speak, it's clear they're all locked and loaded for September rate cut and they're going to maintain their optionality." Data released early Wednesday showed July U.S. private payrolls increased far less than expected, indicating an easing in persistent labor market tightness. Nvidia jumped, helped by a rosy 2024 sales forecast for artificial intelligence chips by peer Advanced Micro Devices , whose shares also gained. Microsoft dipped after it reported massive AI-related expenses. Meta jumped ahead of its results. Apple and Amazon.com, which will report earnings on Thursday, gained as well. (Reporting by Chibuike Oguh in New York; Additional reporting by Noel Randewich in Oakland, California; Editing by Richard Chang)

US Stocks: S&P 500, Nasdaq boosted by chip rally, Fed rate cut signals

NEW YORK: The S&P 500 and Nasdaq scored their biggest daily percentage gains since Feb. 22 and the Dow rose on Wednesday as chip stocks rallied and the Federal Reserve kept U.S. interest rates unchanged while signaling possible easing in September if inflation cools. Seven out of the 11 S&P 500 sectors advanced, led by technology and consumer discretionary stocks. Healthcare, real estate and consumer staples were the weakest. The Fed kept its benchmark overnight interest rate in the 5.25%-5.50% range as it ended its two-day policymaking meeting on Wednesday, but opened the door to easing in September, seven weeks shy of the November U.S. elections. The benchmark U.S. 10-year note yield fell 9.8 basis points to 4.043%. The Dow Jones Industrial Average rose 0.24% to 40,842.79, the S&P 500 gained 1.58% to 5,522.30 and the Nasdaq Composite advanced 2.64% to 17,599.40. "It was the worst kept secret on the planet that the Fed was not going to cut in July," said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. "The Fed is going to have its day in the sun in September with a 25 or 50 basis point cut, but I would not be surprised if that is already priced into stocks." During his press conference, Fed Chair Jerome Powell said policymakers discussed the case for cutting rates, but a "strong majority" agreed that now was not the appropriate time. "The statement didn't move the needle at all," said Mark Malek, chief investment officer at Siebert Next in New York, referring to the Fed's official statement. "But listening to him speak, it's clear they're all locked and loaded for September rate cut and they're going to maintain their optionality." Data released early Wednesday showed July U.S. private payrolls increased far less than expected, indicating an easing in persistent labor market tightness. For the month, the S&P 500 climbed 1.1%, the Dow jumped 4.4%, while the Nasdaq lost 0.8%. Nvidia jumped nearly 13%, helped by a rosy 2024 sales forecast for artificial intelligence chips by peer Advanced Micro Devices, whose shares also gained 4.3%. The Philadelphia SE Semiconductor index rose finished up nearly 7%. U.S. President Joe Biden's administration plans to unveil a new rule next month that will expand U.S. powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers, two sources familiar with the matter told Reuters. Microsoft dipped 1% after it posted massive AI-related expenses. Meta jumped 5% after the bell as its earnings beat market expectations. Apple and Amazon.com , which will report earnings on Thursday, closed up 1.5% and 2.9%, respectively. Advancing issues outnumbered decliners by a 2.23-to-1 ratio on the NYSE. On the Nasdaq, 2,603 stocks rose and 1,648 fell as advancing issues outnumbered decliners by 1.58-to-1. The S&P 500 posted 68 new 52-week highs and one new low while the Nasdaq Composite recorded 168 new highs and 104 new lows. Total volume on U.S. exchanges was 13.3 billion, compared with the 20-day moving average of 13.27 billion. (Reporting by Chibuike Oguh in New York; Additional reporting by Noel Randewich in Oakland, California; Editing by Richard Chang)

Nasdaq, S&P 500 ride chip-stock wave before Fed verdict; Microsoft slips

The Nasdaq and the S&P 500 rose more than 1% each on Wednesday after a bullish forecast from AMD boosted struggling chip stocks, while Microsoft faltered ahead of an interest-rate decision from the U.S. central bank. Advanced Micro Devices soared 10.1% after lifting its 2024 forecast for AI-chip sales, spreading the cheer to Nvidia, which rose 10.2%. The broader Philadelphia SE Semiconductor index was up 5.0%. However, Microsoft lost 1.6% as it plans to spend more this fiscal year to build its AI infrastructure, even as growth in its cloud business slowed - another sign that the payoff from hefty investments in the technology could take longer than hoped. "AMD's results pleased investors more than Microsoft's disappointed, and as a result people are adding to positions in the semiconductor space," said Sam Stovall, chief investment strategist at CFRA Research. Other megacaps also rose, with Apple gaining 0.9%, Meta Platforms adding 1.5% and Amazon.com up 2.0% ahead of their quarterly results, due through the week. At 9:54 a.m. ET, the Dow Jones Industrial Average was down 33.60 points, or 0.08%, at 40,709.73, the S&P 500 was up 65.74 points, or 1.21%, at 5,502.18, and the Nasdaq Composite was up 347.43 points, or 2.03%, at 17,494.85. The S&P 500 hit a one-week high, with Information Technology stocks leading sectoral gains by 3.0%. Top CD rates today: Rates continue to be competitive But tech and chip stocks have taken a hit this month, after prompting a record-breaking Wall Street run this year on enthusiasm surrounding AI adoption and the prospect of early rate cuts from the U.S. Federal Reserve. Results from Alphabet, Tesla and Microsoft failed to thrill and investors are moving to underperforming sectors, questioning if the AI-driven rally has run its course. The small-caps Russell 2000 index and the blue-chip Dow are on track for their best month this year. On the flip side, the chips index is set for its first monthly decline in three and its worst month since October 2023, while the S&P 500 is on track for a marginal rise, helped by the day's gains. Focus will now shift to the Fed's decision and commentary on interest rates. The central bank is expected to hold rates steady and open the door for a September rate cut. With traders fully pricing in a cut by September, according to CME's FedWatch, the fear is that any disappointment on this front could amplify the recent equity selloff. Fresh employment data showed a lower-than-expected rise in U.S. private payrolls in July, but that is in all likelihood not a true reflection of the labor market, which continues to moderate gradually. Among others, Boeing climbed 0.3% after naming aerospace industry veteran Kelly Ortberg its new president and CEO. Mastercard gained 4.2% after the payments giant's second-quarter profit rose 17%. Pinterest slumped 10.1% after forecasting current-quarter revenue below expectations, while Match Group jumped 11% after a second-quarter revenue beat and a plan to lay off about 6% of its staff. Advancing issues outnumbered decliners by a 2.21-to-1 ratio on the NYSE, and by a 1.24-to-1 ratio on the Nasdaq. The S&P index recorded 43 new 52-week highs and one new low, while the Nasdaq recorded 54 new highs and 42 new lows.

Chip stocks bolster Nasdaq, S&P 500 before Fed verdict

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.) * US private payrolls miss expectations in July - ADP The Nasdaq and the S&P 500 were poised to open sharply higher on Wednesday after a bullish forecast from AMD boosted struggling chip stocks, while Microsoft faltered among megacaps ahead of an interest-rate decision from the Federal Reserve. Advanced Micro Devices soared 7.5% in premarket trading after it lifted its 2024 forecast for AI-chip sales, raising other chip stocks. Nvidia jumped 7.2%, Intel was up 2.2% and Broadcom rose 6.2%. Microsoft lost 1.6% as it plans to spend more this fiscal year to build its AI infrastructure, even as growth in its cloud business slowed - another sign that the payoff from hefty investments in the technology could take longer than hoped. Alphabet gained 1.6%, Meta Platforms rose 0.9% and Tesla was up 0.8%. "AMD's results pleased investors more than Microsoft's disappointed, and as a result people are adding to positions in the semiconductor space," said Sam Stovall, chief investment strategist at CFRA Research. At 8:40 a.m. ET, Dow e-minis were up 87 points, or 0.21%, while S&P 500 e-minis were up 63.75 points, or 1.16%, and Nasdaq 100 e-minis were up 375.75 points, or 1.98%. Tech and chip stocks have taken a hit this month after prompting a record-breaking Wall Street run this year, on euphoria surrounding AI adoption and the prospect of early rate cuts from the U.S. Federal Reserve. Investors, who now see value in underperforming sectors, have started rotating away from megacaps. The Philadelphia SE Semiconductor index is set to log its first monthly decline in three and its worst month since September 2022. The Nasdaq and the S&P 500 - market-cap weighted indexes which are heavily inclined towards expensive tech stocks - are also set for their weakest month in three, while the price-weighted Dow is on track for its best monthly performance since last December. Meta will report earnings after markets close, while results for Apple and Amazon are due on Thursday. Quarterly earnings from tech giants Tesla, Microsoft and Alphabet have so far disappointed investors, who are questioning if the AI-driven rally has run out of steam. Investors are now focusing on the major event of the week - the Fed's decision and commentary on interest rates. The central bank is expected to hold rates steady and open the door for a September rate cut. With traders fully pricing in a cut by September, according to CME's FedWatch, the fear is that any disappointment on this front could amplify the recent equity selloff. Fresh employment data showed a lower-than-expected rise in U.S. private payrolls in July, but that is in all likelihood not a true reflection of the labor market, which continues to moderate gradually. Among others, T-Mobile jumped 2.8% after raising its full-year forecast for monthly bill-paying phone subscriber additions. Mastercard gained 3% after the payments giant's second-quarter profit rose 17%. Pinterest slumped 8.4% after forecasting current-quarter revenue below expectations, while Match Group jumped 11% after a second-quarter revenue beat and a plan to lay off about 6% of its staff. Boeing climbed 2% after naming aerospace industry veteran Kelly Ortberg its new president and CEO. (Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Saumyadeb Chakrabarty)

Wall St. boosted by chip rally, Fed rate cut signals

STORY: U.S. stocks closed higher on Wednesday as chip stocks rallied and the Federal Reserve indicated it could begin cutting interest rates in September. The Dow gained about a quarter-percent, the S&P 500 climbed more than 1.5% and the tech-heavy Nasdaq soared more than 2.6%. The Fed kept its benchmark overnight rate unchanged as it ended its two-day policy meeting, but opened the door to easing in September. Data released Wednesday showed July private payrolls increased far less than expected, indicating a loosening of persistent labor market tightness. Mike Mussio is president of FBB Capital Partners. "If the trend kind of continues, and they get a cut in September and then maybe another one in November, and the tone is, like, 'We see things, you know, inflation continuing to be in check, unemployment we're still mindful of,' and that kind of is a measured trend - to me, that would be the definition from this point of the soft landing." The day's big market movers included Meta Platforms. The Facebook parent, which reported earnings after the close, ended the session up 2.5% before adding roughly 4% in after-hours trading thanks to a rosy ad sales forecast which may help cover its AI-related costs. Leading AI chip maker Nvidia jumped nearly 13%, adding about $330 billion in market value - a record one-day gain for any company on Wall Street. Fellow chip maker Advanced Micro Devices - which ignited the AI rally - gained more than 4% due to a robust 2024 sales forecast for its chips. Tech giants Apple and Amazon, which report earnings on Thursday, also closed higher.

US stock: S&P 500, Nasdaq boosted by chip rally, Fed rate cut signals

On Wednesday, the S&P 500 and Nasdaq experienced their most significant daily percentage gains since February 22nd, while the Dow also rose. This rally was driven by a surge in chip stocks and the Federal Reserve's decision to maintain US interest rates unchanged, while indicating a possible easing in September if inflation cools down. Technology and consumer discretionary stocks led the advance, with seven out of the eleven S&P 500 sectors posting gains. The weakest sectors were healthcare, real estate, and consumer staples. The Fed's decision to keep the benchmark overnight interest rate in the 5.25%-5.50% range was widely anticipated, but the central bank's openness to easing in September, just seven weeks before the November US elections, was noteworthy. The benchmark U.S. 10-year note yield dropped 9.8 basis points to 4.043%. During his press conference, Fed Chair Jerome Powell mentioned that policymakers discussed the possibility of cutting rates, but a "strong majority" agreed that now was not the appropriate time. Analysts interpreted this as a clear indication that the Fed is prepared for a rate cut in September, with some suggesting that this may already be priced into stocks. Data released earlier on Wednesday showed that July US private payrolls increased far less than expected, signaling an easing in persistent labor market tightness. For the month, the S&P 500 climbed 1.1%, the Dow jumped 4.4%, while the Nasdaq lost 0.8%. Nvidia's stock surged nearly 13%, boosted by a positive 2024 sales forecast for artificial intelligence chips by its peer Advanced Micro Devices, whose shares also gained 4.3%. The Philadelphia SE Semiconductor index finished up nearly 7%. The U.S. administration plans to introduce a new rule next month that will expand US powers to stop exports of semiconductor manufacturing equipment from some foreign countries to Chinese chipmakers. Microsoft dipped 1% after reporting substantial AI-related expenses. Meta jumped 5% after the bell as its earnings exceeded market expectations. Apple and Amazon.com, which will report earnings on Thursday, closed up 1.5% and 2.9%, respectively. Advancing issues outnumbered decliners by a 2.23-to-1 ratio on the NYSE and by 1.58-to-1 on the Nasdaq. The S&P 500 posted 68 new 52-week highs and one new low, while the Nasdaq Composite recorded 168 new highs and 104 new lows. Total volume on US exchanges was 13.3 billion, compared with the 20-day moving average of 13.27 billion. (With inputs from agencies) The TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.

Chip stocks boost Nasdaq futures before Fed verdict; Microsoft lags

Futures tied to the Nasdaq index rose on Wednesday after a bullish forecast from Advanced Micro Devices drove chip stocks higher even as Microsoft faltered, while investors geared up for the Federal Reserve's rate decision. AMD soared 8.3% in premarket trading after lifting its 2024 forecast for AI chip sales. Nvidia rose 6.5%, Intel 2.3% and Broadcom 6.4%. "(AMD) is a long way from stealing Nvidia's crown as the king of artificial intelligence, but it is making a dent with demand for AI processors helping sales to data centres more than double," said Derren Nathan, head of equity research at Hargreaves Lansdown. At 7:15 a.m. ET, Dow e-minis were up 31 points, or 0.08%, S&P 500 e-minis were up 52 points, or 0.95%, and Nasdaq 100 e-minis were up 295.5 points, or 1.56%. Megacap tech and chip stocks have taken a hit this month, after steering the U.S. equity market to record highs in 2024, on euphoria around AI adoption and the prospect of early rate cuts from the U.S. Federal Reserve. Investors, who now see value in underperforming sectors, have started rotating away from megacaps. The Philadelphia SE Semiconductor index is set to log its first monthly decline in three and its worst month since September 2022. The Nasdaq and the S&P 500 - market-cap weighted indexes which are heavily inclined towards expensive tech stocks - are also set for their weakest month in three, while the price-weighted Dow is on track for its best monthly performance since last December. Microsoft lost 2.9% as it plans to spend more this fiscal year to build its AI infrastructure, even as growth in its cloud business slowed - another sign that the payoff from hefty investments in the technology might take longer than hoped. Megacaps such as Alphabet, Meta Platforms and Tesla were up between 0.2% and 0.7%. Meta will report earnings after markets close, while results for Apple and Amazon are due on Thursday. Quarterly results from tech giants Tesla, Microsoft and Alphabet have so far disappointed investors, who are questioning if the AI-led rally has run out of steam. Investors are now focusing on the centerpiece event of the week - the Fed's decision and commentary on interest rates. The central bank is expected to hold rates steady and open the door for a September rate cut. With traders fully pricing in a cut by September, according to CME's FedWatch, they fear that any disappointment on this front could amplify the recent equity selloff. The S&P 500 and the Nasdaq fell on Tuesday, weighed by chip and megacap shares, while the Dow outperformed in a fading sector rotation. The ADP National Employment reading for July, due at 8:15 a.m. ET, is also on investors' watch list after Tuesday's U.S. job openings data pointed to continued labor resilience underpinning the economy. Among others, T-Mobile raised its full-year forecast for monthly bill-paying phone subscriber additions, sending the carrier's shares up 3.2%. Starbucks rose 3.4% after its store operation improvements helped meet quarterly profit expectations. Pinterest slumped 10.6% after forecasting current-quarter revenue below expectations, while Match Group jumped 10% after a second-quarter revenue beat and plans to lay off about 6% of its staff. (Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai and Saumyadeb Chakrabarty)

Nasdaq futures lead as AMD boosts chips before Fed verdict; Microsoft drops

(Reuters) - Nasdaq futures jumped more than 1% on Wednesday after a bullish forecast from Advanced Micro Devices bolstered struggling chip stocks, while Microsoft bucked the positive trend in megacaps ahead of a key U.S. interest-rate decision. AMD soared 9.2% in premarket trading after it increased its 2024 forecast for artificial-intelligence-chip sales. Chip stocks such as AI favorite Nvidia, Intel, Marvell Technology, Qualcomm, Broadcom and Arm Holdings jumped between 2% and 5.2%. At 5:39 a.m. ET, Dow e-minis were up 171 points, or 0.42%, S&P 500 e-minis were up 53.25 points, or 0.97%, and Nasdaq 100 e-minis were up 287.5 points, or 1.52%. Megacap tech and chip stocks have taken a hit this month, after steering the U.S. equity market to record highs in 2024, on euphoria around AI adoption and the prospect of early rate cuts from the U.S. Federal Reserve. Investors, who now see value in underperforming sectors, have started rotating away from megacaps. The Philadelphia SE Semiconductor index is set to log its first monthly decline in three and its worst month since September 2022. The Nasdaq and the S&P 500 - market-cap weighted indexes which are heavily inclined towards expensive tech stocks - are also set for their weakest month in three, while the price-weighted Dow is on track for its best monthly performance since last December. Microsoft lost 2.6% as it plans to spend more this fiscal year to build its AI infrastructure, even as growth in its cloud business slowed - another sign that the payoff from hefty investments in the technology might take longer than hoped. In other megacaps, Alphabet, Apple, Amazon.com, Meta Platforms and Tesla were up between 0.2% and 1.3% on the day. Meta will report earnings after markets close, while results for Apple and Amazon are due on Thursday. Quarterly results from tech giants Tesla, Microsoft and Alphabet so far have failed to live up to Wall Street's expectations as investors look for signs to justify the over-stretched valuations for the elite group of stocks, and if the AI-led equity run has steam to spare. Focus turns to a highly anticipated monetary policy decision from the Federal Reserve later in the day, where it is expected to hold rates steady and open the door for a September rate cut. With traders fully pricing in a cut by September, according to CME's FedWatch, they fear that any disappointment on this front could amplify the recent equity selloff. The S&P 500 and Nasdaq fell on Tuesday, weighed by chip and megacap shares, while the Dow outperformed in a fading sector rotation. The ADP National Employment reading for July, due at 8:15 a.m. ET, will also be on investors' watch list after U.S. job openings data on Tuesday pointed to continued labor resilience underpinning the economy. In earnings, Starbucks rose 2.3% after its store operation improvements helped the coffee chain meet quarterly profit expectations. Pinterest slumped 12.5% after forecasting current-quarter revenue below expectations, while Match Group jumped 10% after a second-quarter revenue beat and plans to lay off about 6% of its staff. (Reporting by Ankika Biswas in Bengaluru; Editing by Pooja Desai)

Nasdaq slumps as megacaps, chips fall ahead of Big Tech results

(For a Reuters live blog on U.S., UK and European stock markets, click or type LIVE/ in a news window.) * Procter & Gamble drops on sales expectations miss * Merck down after cutting annual profit forecast The Nasdaq dropped 1% on Tuesday as chip and megacap shares took a hit ahead of Big Tech earnings, while strength in financial stocks kept the Dow afloat in anticipation of a key U.S. Federal Reserve policy decision this week. Microsoft, widely seen as a frontrunner in the artificial intelligence race, will release its quarterly results after markets close. Its stock was down nearly 1%. Other megacap stocks such as Apple, Amazon.com , Meta Platforms, Alphabet and Tesla also fell between 0.10% and 2%, as investors refrained from big bets ahead of tech earnings scheduled through the week. AI favorite Nvidia slumped 5%, leading a sharp erosion in chip stocks and pushing the Philadelphia SE Semiconductor index down 2.4%. At 11:30 a.m. the Dow Jones Industrial Average rose 65.08 points, or 0.16%, to 40,605.01, the S&P 500 lost 24.87 points, or 0.46%, to 5,438.67 and the Nasdaq Composite lost 184.53 points, or 1.06%, to 17,185.68. The S&P 500 Financials index outperformed its sectoral peers with a 1.3% jump, with an index tracking banks also climbing 1.5%. Coupled with Tesla's disappointing results, Alphabet's higher expenditure forecast induced a broad-based market sell-off in the previous week, driven largely by megacap stocks. The bar is set high for these highly valued technology behemoths, whose quarterly results will be scrutinized for signs they have the momentum to spur further AI-led equity rallies. "Big Tech has had a great rally and for it to continue, they're going to have to show benefits of AI and the investments they made in it," said Brian Klimke, chief market strategist at Cetera Investment Management. "If not, we could see more of a rotation into smaller cap stocks and value stocks." Hopes of early rate cuts have prompted an investor run to mid- and small-cap stocks and away from market dominating tech-related sectors. The Russell 2000 small-caps index advanced 0.2% and is poised to sharply outperform the three major U.S. stock indexes in July, while the Dow is set for its best month so far in 2024. The continued improvement in inflation and an easing jobs market have bolstered expectations of the Fed signaling a cut in September in its policy decision on Wednesday. Odds of a 25-basis-point cut are at 88%, according to CME's FedWatch Tool. On the data front, a Job Openings and Labor Turnover Survey pointed to 8.18 million job openings in June, compared to economists' expectation of 8 million, ahead of Friday's Non-farm Payrolls reading. Among single stocks, Procter & Gamble slumped 6% after missing expectations for fourth-quarter sales. Merck lost 10% after the drugmaker cut its annual profit forecast, while CrowdStrike shed 9% after a report that Delta Air Lines sought compensation from Microsoft and the cybersecurity firm for the global cyber outage earlier this month. Cybersecurity and cloud services company F5 jumped 11.2% after forecasting fourth-quarter results above estimates. Advancing issues outnumbered decliners by a 1.16-to-1 ratio on the NYSE, and by 1.31-to-1 on the Nasdaq. The S&P 500 posted 62 new 52-week highs, while the Nasdaq Composite recorded 92 new highs and 80 new lows. (Reporting by Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Pooja Desai)

S&P 500, Nasdaq drop as caution reigns ahead of tech earnings

* Procter & Gamble drops on sales expectations miss * Merck down after cutting annual profit forecast The S&P 500 and Nasdaq stumbled on Tuesday, weighed down by weak chip and megacap shares ahead of earnings from heavyweight tech companies this week, but the Dow managed modest gains. Microsoft, seen by many as leading the artificial intelligence race, fell nearly 2% ahead of its quarterly results due after the closing bell. Chipmaker Nvidia, expected to be a prime beneficiary of the AI growth potential and the year's second best S&P 500 performer, tumbled more than 6%, weighing on other chip stocks and dragging the Philadelphia semiconductor index down more than 3%. Other megacap names such as Apple, Amazon.com and Meta Platforms, all due to report earnings this week, also fell on growing concerns that the stocks might be overvalued. "A lot of people are looking at artificial intelligence now and saying this is all great but I how do I make money on it," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. "Financially the companies are probably doing quite well, but the question is what are you paying for this? These are not cheap stocks and so you need to go into these things with your eyes open." The Dow Jones Industrial Average rose 148.19 points, or 0.37%, to 40,687.35, the S&P 500 lost 29.82 points, or 0.55%, at 5,433.72 and the Nasdaq Composite fell 209.99 points, or 1.21%, to 17,160.21. Small cap and value stocks such as financials outperformed the broader market to extend a recent rotation out of more expensive stocks as the market has solidified expectations the Federal Reserve will cut rates this year following signs of moderating inflation. The S&P 500 financials index jumped 1.3% to lead gains among the 11 major S&P sectors while technology, down 1.7%, was the worst performer. Megacap stocks fell on Tesla's disappointing results after Alphabet's higher expenditure forecast induced last week's broad-based market sell-off. The market is betting on a slight chance that the Fed will cut rates by at least 25 basis points at the end of its policymaking meeting on Wednesday, but it is completely pricing in a cut for the U.S. central bank's September meeting, CME's FedWatch Tool showed. Several labor data releases this week will culminate in Friday's government payrolls report. On Tuesday, a Job Openings and Labor Turnover Survey pointed to 8.18 million job openings in June, compared to economists' expectation of 8 million. Among single stocks, Procter & Gamble tumbled almost 6% after missing fourth-quarter sales expectations. Merck plunged more than 9% after the drugmaker cut its annual profit forecast. CrowdStrike dropped nearly 11% after a report that Delta Air Lines sought compensation from the cybersecurity firm and Microsoft for the global cyber outage earlier this month. Cybersecurity and cloud services company F5 surged nearly 14% after forecasting fourth-quarter results above estimates. Advancing issues outnumbered decliners by a 1.2-to-1 ratio on the NYSE, and by 1.35-to-1 on the Nasdaq. The S&P 500 posted 65 new 52-week highs and one new low, while the Nasdaq Composite recorded 114 new highs and 113 new lows. (Reporting by Chuck Mikolajczak; Editing by Richard Chang)

US stock futures mixed before Fed; Microsoft drops on disappointing earnings By Investing.com

Investing.com-- S&P futures were flat and Dow futures fell in evening deals on Tuesday as investors hunkered down before a decision on interest rates from the Federal Reserve, while disappointing earnings from Microsoft weighed on major technology stocks. But Nasdaq futures rose, aided by a rebound in chipmaking stocks following stronger-than-expected earnings from AMD, which showed artificial intelligence still remained an earnings driver for the sector. S&P 500 Futures steadied at 5,476.75 points, while Dow Jones Futures fell 0.4% to 40,795.0 points by 19:39 ET (23:39 GMT). Nasdaq 100 Futures rose 0.4% to 19,021.0 points. Microsoft Corporation (NASDAQ:MSFT) fell more than 3% in afterhours trade after its fourth-quarter cloud revenue growth missed Wall Street estimates. The stock had fallen as far as 7%, but pared losses after it said on an earnings call that cloud growth would accelerate in the coming quarters. While the firm's overall earnings just edged past estimates for the June quarter, revenue from Azure, the company's cloud business, grew 29%, missing estimates of 30.2% and also slowing from the 31% rise in the prior quarter. This came even as investment in AI saw capital expenditure surge by $5 billion in the quarter. Azure is Microsoft's main platform for its AI offerings, and serves as a barometer for demand for the sector. The Redmond, Washington-based tech giant is among the frontrunners on Wall Street to monetize AI, having tied up with OpenAI to release a slew of products over the past year. Microsoft's earnings sparked losses across most of its heavyweight tech peers, given that they came just a week after earnings from Alphabet Inc (NASDAQ:GOOGL) showed a similar trend. Amazon.com Inc (NASDAQ:AMZN) and Meta Platforms Inc (NASDAQ:META), which are set to report earnings on Wednesday, fell 1% and 0.7%, respectively, while Apple Inc (NASDAQ:AAPL), which will report earnings on Thursday, fell 0.5%. Advanced Micro Devices Inc (NASDAQ:AMD) surged over 8%, while rival NVIDIA Corporation (NASDAQ:NVDA) added 5.4% after AMD clocked stronger-than-expected earnings and forecast upbeat revenue for the current quarter, citing strong demand from AI. AMD's earnings sparked gains across chipmaking stocks. But they highlighted a potential division in AI-fueled earnings- where the suppliers of AI-related equipment appeared to be faring better than their customers, especially following Microsoft's disappointing showing. A measure of bargain buying also aided chipmakers, after heavy losses on Tuesday and over the past two weeks. Wall Street indexes ended lower on Tuesday as investors pivoted from tech and into more economically sensitive sectors amid caution over the Fed and major tech earnings. The Fed is widely expected to keep rates steady at the conclusion of a meeting on Wednesday. But any signals on its plans to cut rates will be closely watched, as recent inflation data fueled growing conviction the Fed will begin cutting in September.

S&P 500, Nasdaq 100 Slide Ahead Of Microsoft Earnings

JOLTZ job openings exceeded expectations, and coupled with easing inflation, rate cut discussions are prevalent. Earnings season has surprised many as companies worldwide lower their full-year sales and profit guidance. This comes against a backdrop of rate uncertainty, the China growth picture and rising geopolitical uncertainty. It would appear that the higher for longer rate environment is finally starting to take its toll on companies. Debate continues to rage on the health of the Chinese economy. Some analysts are of the opinion that the weak demand out of China is due to concerns about the future. The Government has introduced some measures of late, with the hope being that this will bear fruit. The S&P 500 and Nasdaq 100, have slid following the US open today, with the tech-heavy Nasdaq down as much as 1.45% at the time of writing. Given the underwhelming numbers from high-profile companies this season, so far, have been disappointing to say the least. Will Microsoft (MSFT) follow in the same vein? Microsoft is delivering their fiscal Q4 results after market close today. For the quarter, Microsoft is projected to report earnings per share of $2.94 on revenue of $64.5 billion, according to Bloomberg data. In the same period last year, Microsoft posted EPS of $2.69 on revenue of $56.2 billion. Cloud revenue is anticipated to reach $36.8 billion, with Intelligent Cloud revenue, including Azure, expected to total $28.7 billion. Microsoft is widely seen as the frontrunner in the AI race and thus AI earnings will be monitored closely. Beyond Microsoft's AI earnings, investors will be keen to learn about the company's future spending plans on the technology. In Q3, Microsoft reported $14 billion in capital expenditures, including finance leases, as it continues to expand its AI infrastructure. Jobs data and the NFP report is due on Friday, and today provided the first glimpse at some jobs data. JOLTZ job openings came in higher than expected; this coupled with inflation easing has kept rate cut chatter in overdrive. From a technical perspective, the S&P 500 is currently down about 1.2%. The index has been pulled lower primarily by the tech sector, which is down 2.08%, while energy is up 1.22%. Looking at the chart, the S&P 500 is now very close to last Thursday's lows around the 5392 mark and appears to be testing the support-turned-resistance at 5421. A break below the 5392 support level could lead to further declines, with support expected around 5330 and 5267. Conversely, an upward move from here will first need to overcome intraday resistance at 5444 before the 5500 level becomes significant again. Above the 5500 mark, both the 100-day and 200-day moving averages provide resistance ahead of the recently set all-time highs.

Microsoft, Pinterest, Humana fall premarket; AMD, Nvidia and Starbucks rise By Investing.com

Investing.com -- U.S. stock futures climbed strongly Wednesday, amid optimism ahead of the conclusion of the latest Federal Reserve meeting, and with more influential companies set to report earnings season. Microsoft (NASDAQ:MSFT) stock fell 3.5% after the software giant disappointed with its fourth-quarter update, indicating it would spend more money on artificial intelligence infrastructure even as growth slowed in its cloud business. AMD (NASDAQ:AMD) stock rose 8.5% after the chipmaker increased its 2024 forecast for artificial intelligence chip sales by $500 million and said supplies would remain tight through 2025. Nvidia (NASDAQ:NVDA) stock rose 6.5%, boosted by AMD's results, and helped by Morgan Stanley (NYSE:MS) reassigning a 'Top Pick' rating after the chipmaker's shares fell sharply amid a broader market sell-off. Starbucks (NASDAQ:SBUX) stock rose 3.4% after the coffee chain met expectations for quarterly profit, even as its global sales declined on persistent weakness in consumer spending in its top markets of the U.S. and China. T-Mobile US (NASDAQ:TMUS) stock rose 2.7% after the telecoms company raised its full-year forecast for monthly bill-paying phone subscriber additions as more customers opted for its discounted unlimited plans that include streaming perks. Pinterest (NYSE:PINS) stock slumped 10% after the social media service offered a softer-than-expected outlook for its third quarter, despite achieving a record 522 million global monthly active users, marking a 12% increase from the previous year. Match Group (NASDAQ:MTCH) stock soared 10% after the online dating service recorded a second-quarter revenue beat and announced plans to lay off about 6% of its staff to cut costs. Humana (NYSE:HUM) stock fell 8.8% after the health insurer said its profit fell, even with strength in its government-backed Medicare Advantage insurance business for older adults. GE HealthCare (NASDAQ:GEHC) stock fell 0.9% after the medical device maker cut its annual revenue growth forecast as it expects a slowdown in China sales. DuPont (NYSE:DD) stock rose 4.7% after the chemicals giant lifted its full-year guidance as it swept past earnings estimates for the second quarter.