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Nasdaq Futures Surge as Nvidia’s Strong Sales Forecasts Boost Investor Confidence, Economic Data on Horizon

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Nasdaq 100 E-Mini futures (NQH24) are seeing a robust upsurge of +1.94% today, as investors react positively to chip designer Nvidia’s upbeat results and guidance, and turn their attention to upcoming U.S. business activity data.

Nvidia’s Impressive Performance

NVIDIA Corporation (NVDA) soared over +14% in pre-market trading after the semiconductor giant released impressive Q4 results and provided a stronger-than-anticipated Q1 revenue outlook. Chief Executive Officer Jensen Huang expressed confidence stating, “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries, and nations,” reinforcing investor optimism.

Federal Reserve’s Monetary Policy

Minutes from the Federal Open Market Committee’s January 30-31 meeting detailed concerns among the majority of policymakers about initiating interest rate cuts too soon. The focus was on the need for additional confidence to ensure that inflation continues slowing toward the Fed’s 2% target. The committee concurred that borrowing costs had likely reached their peak, but the exact timing of the first interest-rate cut remained uncertain. “Participants generally noted that they did not expect it would be appropriate to reduce the target range for the federal funds rate until they had gained greater confidence that inflation was moving sustainably toward 2 percent,” stated the FOMC minutes released on Wednesday.

Stock Market Recap

Palo Alto Networks Inc (PANW) plummeted over -28% after the cybersecurity company lowered its full-year revenue forecast, while Keysight Technologies Inc (KEYS) slumped more than -6% after providing weaker-than-expected Q2 guidance. Teladoc Inc (TDOC) also tumbled over -23% after the company posted mixed Q4 results and issued disappointing FY24 revenue guidance. On the brighter side, Garmin Ltd (GRMN) surged over +8% following its better-than-expected Q4 results, and Toll Brothers Inc (TOL) gained about +4% after the homebuilder posted upbeat Q1 results.

Continued Economic Insights

Richmond Fed President Thomas Barkin voiced concerns about lingering price pressures in certain sectors despite an improvement in overall inflation. He emphasized, “You do worry that when the goods price deflation cycle ends, you’re going to be left with shelter and services higher than you’d like it.” Fed Governor Michelle Bowman added that the current economic conditions do not warrant the central bank reducing interest rates, stating, “Certainly not now.”

Market Expectations and Earnings Reports

U.S. rate futures are indicating a 4.5% chance of a 25 basis point rate cut at the next central bank meeting in March, and a 28.2% chance of a 25 basis point rate cut at May’s policy meeting. Notable companies like Intuit (INTU), Booking Holdings (BKNG), MercadoLibre (MELI), PG&E (PCG), Dominion Energy (D), Moderna (MRNA), Copart (CPRT), and Keurig Dr Pepper (KDP) are scheduled to announce their quarterly results today.

Upcoming Economic Data

All eyes are focused on the U.S. S&P Global Manufacturing PMI preliminary reading, with economists forecasting the February Manufacturing PMI to stand at 50.5, compared to the previous value of 50.7. Investors will also closely watch U.S. Existing Home Sales data and U.S. Initial Jobless Claims data.

Global Market Trends

The Euro Stoxx 50 futures are up +1.02%, mirroring the Nvidia-inspired global rally. Technology stocks led the gains on Thursday as investors cheered Nvidia Corp.’s better-than-expected performance and outlook.

Conclusion

The positive momentum in the markets, fueled by Nvidia’s outstanding sales forecast, showcases the potential for a robust economic outlook. Investors are eagerly awaiting upcoming economic data and quarterly earnings reports to gain further insights into the market trajectory.

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