Nasdaq futures jump after Nvidia earnings impress, while Dow futures dip

What’s driving markets

Well-received earnings from AI chipmaker Nvidia
NVDA,
+3.17%
helped boost broader markets, setting the Nasdaq up for a substantial rebound after the open. Analysts said Nvidia’s strong sales and third-quarter guidance were helping to boost prospects for the broader technology sector.

“Basically, semiconductors in general are considered to be early cycle. So they are leading indicators for the rest of the technology space,” said Ivana Delevska, founder and CIO of Spear Invest, during a phone interview with MarketWatch.

“There’s an entire ecosystem of companies around them, whether it’s providing cyber security, data management, data streaming.”

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, agreed: “Nvidia smashing the forecast ceiling has also lifted the mood elsewhere.”

Shares of Palantir Technologies
PLTR,
+4.29%,
Advanced Micro Devices
AMD,
+3.57%
and OpenAI investor Microsoft
MSFT,
+1.41%
rose in premarket action.

Dow Jones Industrial Average futures underperformed as shares in Boeing
BA,
-0.65%
fell nearly 2% on reports of a new defect identified on the 737 Max aircraft.

Falling implied borrowing costs were also helping the mood Thursday. The benchmark 10-year U.S. Treasury yield, which earlier this week hit a near 16-year peak of 4.36% has pulled back to 4.178% after survey’s of economic activity in Europe and the U.S., released Wednesday, suggested a deteriorating global economy.

“The rally in U.S. stocks and the retreat of Treasury yields followed underwhelming economic reports as the market fell back into the ‘bad news is a good’ mode,” said Stephen Innes, managing partner at SPI Asset Management.

“But encouragingly for equity investors, the weaker U.S. data lends more weight to the argument for the Federal Reserve to pause its interest rate hikes,” Innes added.

With that in mind traders will have an eye on the Jackson Hole central bankers economic policy symposium, which begins Thursday, and which on Friday is expected to deliver a speech by Fed Chair Jerome Powell.

Investors received another batch of U.S. economic data Thursday, including weekly jobless benefit claims numbers. Data showed the number of Americans who applied for unemployment benefits last week fell by 10,000 to a three-week low of 230,000, offering further evidence that the labor market remains rock solid.

Data on durable-goods orders for long-lasting goods rose in July for the third month in row if recent ups and downs at Boeing are set aside. Orders increased 0.5% in July if transportation, autos and planes, are excluded.

Companies in focus

• Nvidia Corp.‘s shares
  NVDA,
  +3.17%
  jumped 8% in premarket trade after the graphics-chip maker late Wednesday reported a 141% surge in data-center sales and record results, while shares of AI-rival Advanced Micro Devices Inc.
  AMD,
  +3.57%
  and third-party semiconductor foundry Taiwan Semiconductor Manufacturing Co.
  TSM,
  +2.15%
  both rose 3% following Nvidia’s results. ASML Holding
  ASML,
  +1.44%,
  the microchip equipment maker, saw its stock rise by 2%.

• Boeing stock
  BA,
  -0.65%
  fell 2% and Spirit AeroSystems
  SPR,
  -0.09%
  shares fell 4% after disclosing an issue with fastener holes on Boeing 737 Max aircraft.

• U.S. Steel stock
  X,
  -2.19%
  fell 4% to $30.10, extending a decline from Wednesday after Esmark withdrew its offer for the company that is being pursued by Cleveland-Cliffs
  CLF,
  +0.93%.