S&P 500 and Dow futures tempered ahead of jobs data, but chips and software stocks rise
S&P 500 futures and Dow futures were little altered on Friday, ahead of an important U.S. employment report that may influence the interest rate outlook. Nasdaq's futures rose as Microchip Technology's and Atlassian’s strong forecasts helped chip and software shares.
Wall Street's major indexes are on course for a strong week of gains. The S&P 500, Dow and Nasdaq all look set to have their best weeks since April.
Stronger-than-expected results from AI-related companies this reporting season have propelled the Dow and the S&P 500 to fresh record highs, while helping the Nasdaq recover from a pullback that had briefly pushed it ?nearly 10% below its previous peak.
In premarket trading on Friday, Atlassian, a collaboration software company, soared 28.5% and Microchip Tech climbed 8.5% as both companies?forecast their quarterly revenue higher than estimates. Cloudflare, a cybersecurity company, gained 15.6% as it raised its revenue forecast for the full year. These reports also boosted the wider sectors. Chip?stocks Marvell, Micron, and Service Now all rose.
The White House, in an effort to boost domestic production,?imposed a number of price floors, and a 15 percent tariff on products that are made with polysilicon. Polysilicon is the raw material?used?in semiconductors, and solar panels, and it's primarily?produced?by China. At 05.15 a.m. Dow E-minis fell 20 points or 0.04% and S&P E-minis rose 12.75 points or 0.16%. Nasdaq E-minis rose 158.5 points or 0.54%.
A LOOK AT JOBS DATA At 8:30 a.m., the Labor Department will announce its non-farm payrolls for July. The economy should have added 80,000 new jobs in July, up from 57,000 a month earlier. The unemployment rate is expected to remain the same at 4.2%, and average annual earnings will be 3.5%.
Kevin Warsh, the new chairman of the Federal Reserve, has given investors very little information about monetary policy and economic data.
The CME FedWatch?Tool revealed that the odds of a September rate increase and a no-change are almost equal. Last week, traders were pricing in a 63% chance of a rate hike versus a 37% probability for rates remaining unchanged.
The short-term Treasury yields, which reflect expectations for interest rates in the near-term, were above 4%, as crude oil prices climbed above $83 per barrel, raising inflation fears. Yemen's Iran aligned?Houthis launched an attack on Saudi Arabia. A report stated that Iran was reviewing a draft bill which would ban U.S. and Israeli vessels as well as other "hostiles" from transiting Strait of Hormuz. Airbnb, a vacation rental company, gained 8.8% in the second quarter after exceeding revenue estimates. This was due to strong demand worldwide for travel as well as a boost by first-time users at the FIFA World Cup.
Solar stocks First Solar and SolarEdge both climbed 8.7% after Trump's trade action to compete with China.
(source: Reuters)
