U.S. equities are positioned for a technology-led advance Thursday after Nvidia delivered stronger-than-expected results and a bullish long-term AI demand forecast. At 5:05 a.m. ET, S&P 500 futures were up 0.42%, Nasdaq 100 futures were up 1.03% and Dow futures were down 0.06%. Nvidia was up 7.4% premarket, with strength spreading across semiconductors and software.
Stocks finished nearly unchanged Wednesday after hotter-than-expected inflation data. The Dow fell 0.21%, the S&P 500 slipped 0.02%, the Nasdaq declined 0.08% and the Russell 2000 lost roughly 0.1%. Breadth was negative at 1.16:1 on the NYSE and 1.41:1 on the Nasdaq, while U.S. exchange volume totaled 14.2 billion shares versus a 16.2 billion 20-day average.
Rates moved modestly higher Wednesday, with the 2-year Treasury yield up 3 basis points to 4.21%, the 10-year up 2 basis points to 4.65% and the 30-year up 1 basis point to 5.17%. Yields are slightly softer early Thursday, with the 10-year around 4.65% and the 30-year near 5.17%. The DXY is near 99.16, the euro around $1.1652, sterling near $1.359 and the dollar near ¥159.35.
Oil continues to retrace its geopolitical premium. After October WTI fell 0.52% Wednesday to $81.93, crude is down another roughly 1.7% near $80.83 this morning as Iran-Oman discussions raise hopes for improved shipping through the Strait of Hormuz. December gold fell 0.94% Wednesday to $4,650.30 and is roughly unchanged near $4,653 this morning.
Wednesday’s data showed headline PCE inflation holding at 3.7% year over year versus 3.6% expected, while core PCE remained 3.3%. Second-quarter GDP growth was unrevised at 1.5%, although consumer spending was revised higher to 3.4%. Today’s calendar includes weekly jobless claims, July advance goods trade and wholesale/retail inventories at 8:30 a.m. ET, followed by the Kansas City Fed Manufacturing Index at 11:00 a.m. and a 7-year Treasury auction at 1:00 p.m. The Jackson Hole symposium begins today, with Fed Chair Kevin Warsh scheduled to speak Friday at 10:00 a.m. ET. Markets currently assign roughly a 36%-40% probability of a September rate increase and about a 70% chance of at least one hike by December.
Sector Highlights
Sector performance was mixed Wednesday. Industrials led at +1.07%, followed by Utilities +0.47%, Technology +0.37% and Energy +0.27%. Health Care fell 1.01%, Communication Services declined 0.71%, Consumer Discretionary lost 0.62%, Real Estate fell 0.54%, Consumer Staples declined 0.40%, Financials slipped 0.11% and Materials edged down 0.02%.
Information Technology
- Nvidia (NVDA +7.4% premarket) is surging after forecasting third-quarter revenue of $108 billion, plus or minus 2%, well above the $104.19 billion consensus, and projecting approximately 70% revenue growth in fiscal 2028 versus Wall Street expectations closer to 44%. Second-quarter data-center revenue more than doubled to $89 billion, topping the $85.08 billion consensus. Nvidia said its Vera Rubin platform has begun shipping and should account for roughly one-fifth of current-quarter data-center revenue, while its expanded partnership with Amazon Web Services calls for another 2 million Nvidia GPUs to be deployed during 2027-2028. Memory shortages remain the primary supply constraint and are expected to pressure gross margins.
- Micron Technology (MU +4.2%), Marvell Technology (MRVL +5.2%), Broadcom (AVGO +1.6%), SanDisk (SNDK +4.9%) and Western Digital (WDC +3.4%) are participating in the Nvidia-driven AI infrastructure rally. Marvell reports after today’s close, with consensus calling for approximately $0.93 of EPS and $2.71 billion of revenue. Its custom-silicon and data-center outlook will provide another read on AI infrastructure spending.
- Salesforce (CRM +11.8% premarket) rallied after raising its full-year revenue and earnings forecasts and expanding its Anthropic partnership through a new “Claudeforce” offering. Quarterly revenue rose 11% to $11.35 billion, while Salesforce increased fiscal 2027 revenue guidance to $46.1-$46.4 billion from $45.9-$46.2 billion. Adjusted EPS guidance rose sharply to $16.67-$16.71, aided by operating performance, buybacks and investment gains. Management cited continued momentum in Agentforce, Data 360 and Slack.
- CrowdStrike (CRWD +8.8% premarket) beat second-quarter expectations and raised its full-year revenue forecast. Revenue reached $1.47 billion versus $1.44 billion expected, adjusted EPS was $0.31 versus $0.29, and annual recurring revenue increased 25% to $5.84 billion. CrowdStrike now expects full-year revenue of $5.991-$6.01 billion, up from $5.91-$5.96 billion previously, as demand for cloud-based cybersecurity and AI-security products remains strong.
- HP Inc. (HPQ) was down about 9% in extended trading despite quarterly revenue rising 12.5% to $15.7 billion, well above the $14.38 billion consensus. PC unit shipments fell 16%, however, and Personal Systems operating margins narrowed as memory and component inflation outpaced price increases. HP expects fourth-quarter adjusted EPS of $0.69-$0.79, above the $0.67 consensus, but warned that commodity costs will keep revenue below normal seasonal patterns.
- Workday (WDAY) and Autodesk (ADSK) report after the close. Consensus estimates call for Workday EPS of roughly $2.61 on $2.64 billion of revenue and Autodesk EPS of approximately $3.12 on $2.01 billion of revenue. Their guidance will provide another test of enterprise-software spending following the strong Salesforce and CrowdStrike reactions.
Communication Services
- Meta Platforms (META) is modestly higher after agreeing to pay as much as $18 billion over ten years to settle claims by nearly all U.S. states that Facebook and Instagram were designed to addict children. Meta will introduce a default two-hour daily limit for teenage users, overnight restrictions, stronger age verification and limits on school-hour notifications. The settlement avoids a potentially lengthy trial while leaving Meta’s core personalized-feed and advertising businesses largely unchanged.
- The Meta agreement is also creating pressure for competing social-media platforms. About 30% of Meta’s potential payment is conditional on rivals adopting comparable safeguards. Alphabet (GOOGL) fell 1.4% Wednesday and Snap (SNAP) dropped 8.4% as investors assessed whether YouTube and Snapchat could face similar settlements and usage restrictions.
Consumer Discretionary
- Wendy’s (WEN -14% after hours) fell sharply after reports that Nelson Peltz’s Trian Fund Management no longer plans to pursue a take-private bid at this time. Trian owns roughly 16% of Wendy’s and had been considering a consortium bid earlier this month. Sources cited concerns about Wendy’s operating performance, valuation and strategic direction, although Trian remains open to revisiting its plans. Wendy’s new CEO Bob Wright is attempting to stabilize declining sales through a five-point turnaround strategy.
- Best Buy (BBY) reports before the open after gaining 2.5% Wednesday. Consensus expectations call for approximately $1.37 of EPS and $9.58 billion of revenue. The report will provide a read on electronics demand, consumer trade-down behavior and the impact of higher memory and component costs that are already pressuring PC manufacturers.
- Gap (GAP) reports after the close, with consensus expectations near $0.48 of EPS and $3.69 billion of revenue. Same-store sales, Old Navy performance and promotional activity will be closely watched as apparel retailers navigate increasingly selective consumer spending.
- Ulta Beauty (ULTA) also reports after the close. Consensus calls for roughly $6.19 of EPS and $2.98 billion of revenue, with comparable-store sales and beauty-category demand providing another read on consumers’ willingness to maintain discretionary spending despite weaker confidence readings.
Consumer Staples
- Dollar Tree (DLTR) reports at approximately 6:30 a.m. ET. Consensus expectations are around $1.13-$1.15 of EPS and $4.85-$4.86 billion of revenue, with investors focused on comparable-store sales, its expanding multi-price strategy and whether trade-down demand is offsetting pressure from wages, shrink and price competition.
- Dollar General (DG) follows before the open, with consensus near $2.01 of EPS and $11.19 billion of revenue. Wall Street will focus on traffic from lower-income consumers, store-remodeling initiatives and whether inflation continues to push higher-income shoppers toward value retailers.
- Hormel Foods (HRL) reports before the open with expectations for approximately $0.35 of EPS and $3.03 billion of revenue. Volume trends, pricing and input-cost commentary will be important after packaged-food companies have faced uneven demand from consumers increasingly focused on value.
Data sourced from FactSet/Reuters
