Nasdaq, S&P futures driven higher by Nvidia gains

Stock index futures pointed to a higher open from the broader market Thursday with growth on the front foot.

Nasdaq 100 futures (NDX:IND) +1.2% and S&P futures (SPX) +0.6% were higher. Dow futures (INDU) were flat, missing out on the Nvidia (NVDA) party.

NVDA rose 8% premarket as results and guidance showed huge AI demand ramping up even more.

“Being an early beneficiary of a megatrend like AI is an enviable and rare opportunity, but bears will be arguing that at some point the valuation will start to appear full,” Sophie Lund-Yates, analyst at Hargreaves Landsdown, wrote. “Luckily for Nvidia, a cursory glance would suggest there aren’t many bears around.”

Rates were steady after a substantial pullback following weak PMI data. The 10-year Treasury yield (US10Y) fell 1 basis point to 4.19% and the 2-year yield (US2Y) rose 2 basis points to 4.97%.

See how rates are trading across the curve.

“The broader rise in rates had largely been driven by the narrative surrounding a surprisingly resilient US economy,” ING said. “So, when that narrative gets challenged, a large market reaction can be expected. For the US, PMIs would not have been the usual suspect, but when the disappointment in the data is as large as today – and also happening on a global scale – the market takes note.”

Jackson Hole kicks off today and the market will be paying attention to any soundbites from Fed officials and policymakers.

“As we await Fed Chair Powell’s speech at Jackson Hole tomorrow, this challenge means that central bankers have a much harder time relative to last year,” Deutsche Bank’s Henry Allen said. “Bear in mind that a year ago, CPI inflation in both the US and the Euro Area was still running above 8%, so the way forward was pretty clear for policymakers. But now inflation has fallen by some distance, there’s much more doubt about how sticky it will end up proving, and thus how much more central bankers still need to do.”

July durable goods orders arrive before the bell. Economists expect that orders fell 4%, with core durable orders rising 0.2%.

“More broadly, we are skeptical about the durability of any capex rebound when the full effects of the Fed’s tightening have yet to feed through.”

Weekly jobless claims arrive at the same time. They are expected to remain steady around 240K.