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US stock futures surge higher; Super Micro Computer disappoints

Published 2024-08-06, 08:00 p/m
© Reuters
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Investing.com -- U.S. stock index futures rose Wednesday, continuing the recent rebound rally on Wall Street although sentiment remains fragile.

At 06:25 ET (10:25 GMT), Dow Jones Futures rose 330  points, or 0.8%, S&P 500 Futures jumped 60 points, or 1.2%, and Nasdaq 100 Futures surged 250 points, or 1.4%. 

Wall Street indexes rose on Tuesday, recovering a measure of the hefty losses seen over the past week amid concerns over a U.S. recession and a tech slowdown.

The S&P 500 and the NASDAQ Composite both rose 1%, climbing from three-month lows, while the Dow Jones Industrial Average rose 0.8%. 

These futures were boosted by comments from a senior Bank of Japan official downplaying the bank's plans to raise interest rates while markets remain volatile.

Market stress elevated

That said, sentiment towards risk-driven assets remained frail amid persistent concerns over slowing growth and middling earnings.

Goldman Sachs (NYSE:GS) noted that its Financial Stress Index (FSI) has tightened significantly over the past two days but remains within normal historical levels.

"Most of the tightening has been driven by higher expected volatility in the equity and bond markets, while conditions in short-term funding markets have remained broadly stable,” Goldman economists wrote in the note.

“So while market stress is noticeably higher than a week ago, our FSI suggests that there have been no serious market disruptions to date that would force policymakers to intervene."

Walt Disney earnings due

There are more earnings to digest Wednesday, including entertainment giant Walt Disney (NYSE:DIS), CVS Health (NYSE:CVS) and Shopify (NYSE:SHOP).

Also in the spotlight will be Super Micro Computer (NASDAQ:SMCI) as the data center operator's stock plunged in premarket trade as its June quarter earnings missed estimates, raising more concerns over just how much demand the artificial intelligence industry was generating.

Airbnb (NASDAQ:ABNB) also fell sharply after the house rental company forecast third-quarter revenue below estimates and warned of shorter booking windows, suggesting travelers were waiting until the last minute to book due to economic uncertainty.

The resilience of S&P 500 earnings remains intact despite growing recession fears and recent negative price action, Citi strategists said in a Wednesday note.

The bank’s Citi Economic Data Change index, which summarizes US macro data trends, is indicating further deterioration for the U.S. economy. 

But interestingly, while economic data was weak in 2022, S&P 500 earnings growth remained flat rather than severely negative, as rolling earnings recessions mitigated the overall index impact.

Overall, the strategists maintain confidence in their $250 EPS forecast for the S&P 500 in 2024, which is slightly higher than the current bottom-up consensus of around $243.

"But even that level of earnings, if not somewhat lower, would still represent significant improvement over 2023,” strategists argued.

“While not locked in by any means, with Q2 reports mostly behind and most corporates essentially halfway through Q3, we struggle to see earnings expectations moving materially lower than current consensus."

"The bigger issue will be with 2025 earnings should more pronounced macro slowing unfold during the remainder of this year. But, again, we expect more resilience versus history."

(Ambar Warrick contributed to this article.)

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