US pre-open: Futures higher following Nvida's Q1 earnings

23rd May 2024 11:35

(Sharecast News) - Wall Street futures were in the green ahead of the bell as investors cheered the latest set of quarterly earnings from chipmaker Nvidia after the close.

As of 1240 BST, Dow Jones futures were up 0.10%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.61% and 1.04% higher, respectively.

The Dow closed 201.95 points lower on Wednesday following the release of minutes from the Federal Reserve Open Market Committee's latest two-day policy meeting.

AI-darling Nvidia posted stronger-than-expected quarterly earnings after the bell on Wednesday and announcing it would be launching a ten-for-one stock split. Nvidia's Q2 revenue guidance of roughly $28.0bn also beat consensus estimates of $26.61bn.

Trade Nation's David Morrison said: "US stock indices traded in a narrow range for most of yesterday ahead of two significant updates. Minutes from the Fed's last monetary policy meeting were released early in the evening, and these were followed by Nvidia's Q1 earnings report after the close. Equities took a tumble following the publication of the FOMC's minutes. Members were puzzled that the downward trend in inflation has stalled this year, while other economic indicators suggest that US growth is slowing. Many members have expressed their uncertainty over the future path of inflation, saying more time is required to provide evidence that inflation will resume its downward trend back towards the 2% target. In other words, many Fed members feel that the current trend in the data does not support a rate cut in the near-future, and a rate hike cannot be taken off the table, even as most FOMC members believe that current policy is restrictive enough.

"As far as the markets are concerned, there are worries that the Fed is bamboozled when it comes to its outlook for inflation. Despite this, the prevailing view is that mega-cap stocks can continue to do well even if rates stay at current levels. In other news, Nvidia released results after the close. The chip giant is at the forefront of developments in generative AI. It has repeatedly surprised investors over the past twelve months by announcing earnings and revenues which have blown way past analysts' expectations. It was the same last night. In addition, there was more positive forward guidance, and the announcement of a 10-for1 stock split which will raise trading volumes. The stock soared over 6% breaking above $1,000 to hit a fresh record. The news has helped to lift tech stocks, as well as the broader market. Nvidia is a major constituent within the S&P 500 and Nasdaq-100, and both indices are sharply higher this morning and trading at fresh record highs. The next big test is whether equities can build on these gains once the US opens this afternoon."

Elsewhere in the corporate space, Ralph Lauren, BJ's Wholesale, and Workday will all report earnings on Thursday.

On the macro front, weekly jobless claims data will be out at 1330 BST, as will the Chicago Fed's April national activity index, while preliminary readings of S&P Global's manufacturing and services PMIs will be out at 145 BST, monthly new homes sales data will be on deck at 1500 BST, and the Kansas Fed's March manufacturing activity index will follow at 100 BST.

Reporting by Iain Gilbert at Sharecast.com