Wall Street seen opening higher as Nasdaq looks to bounce from 6-week low

What’s driving markets

Bonds have resumed command of the stock market of late. Treasury yields continued to rise in early Thursday trading, with the 10-year yield rising to its highest level since the 2008 financial crisis.

However, stock index futures managed to recover some ground early Thursday after the Nasdaq Composite logged its lowest close since June 27 on Wednesday, according to FactSet data. The drop in stocks was exacerbated by minutes from the Federal Reserve’s July meeting that suggested the central bank intended to keep raising interest rates to tamp down inflation.

Recent stronger-than-expected economic data and comments from some Fed policymakers “has led some investors to reconsider whether the fact that markets had been pricing in victory against inflation came too early, and in any event whether higher rates could remain in place for longer than had been anticipated,” said Richard Hunter, head of markets at Interactive Investor.

Rising yields have had the biggest impact on market-leading technology stocks, which have borne the brunt of this summertime selloff, while the Dow, which is more heavily weighted toward value stocks, has outperformed.

“Technology stocks are seen as being especially vulnerable to higher interest rates, such that the Nasdaq and to some extent the S&P500 bore the brunt of a wave of selling,” Hunter added, while also noting that the overall picture for the year remains strongly positive, with the Nasdaq up 29%, the S&P 500 up 15% and the Dow Jones Industrial Average up 5%.

Cisco Systems
CSCO,
+5.39%
may support the technology sector at the start on Thursday, with its shares up more than 2% in premarket action after the network equipment maker reported strong quarterly results after Wednesday’s close. Stronger-than-expected earnings from Walmart Inc.
WMT,
+0.68%
were also in focus.

Economic updates released Thursday helped support the notion that the U.S. economy is growing at a faster pace than economists had expected, potentially complicating the Fed’s efforts to tamp down inflation.

Jobless benefit claims fell by 11,000 to 239,000 last week, a sign that layoffs in the U.S. labor market remain low. The Philadelphia Fed factory index also shot higher to 12 in August, up from negative 13.5 during the prior month, a sign that manufacturers in the U.S. could be exiting a slump.

Companies in focus

• Walmart Inc.’s stock rose 2% in premarket trade Thursday, after the retail giant posted better-than-expected second-quarter earnings.

• Cisco Systems Inc.’s
  CSCO,
  +5.39%
  stock initially tumbled in after market trade late Wednesday before rising 4% after the computing giant reported fiscal fourth-quarter results. The company issued conservative full-year 2024 guidance that spooked some investors.

• Hawaiian Electric Industries Inc.
  HE,
  -18.65%
  fell 13% after the Wall Street Journal reported that the utility has engaged in talks with restructuring advisers to consider its next steps after the deadly Maui wildfires.