Dow futures rose slightly on Thursday, building on the blue-chip index’s new record close, as investors anticipate more corporate earnings reports and remain optimistic about artificial intelligence. While the Dow gained significantly, the S&P 500 and Nasdaq Composite pulled back due to tech stock profit-taking. Global markets displayed a mixed performance, with Asian tech stocks declining and European markets showing stabilization, as central bank policy and geopolitical developments in the Middle East also remain in focus.
Dow futures nudged higher on Thursday morning, extending gains after the blue-chip index notched another record close. Investors are keenly awaiting a fresh round of corporate earnings results, which, alongside optimism surrounding artificial intelligence, continues to shape market sentiment.
On Wednesday, the Dow Jones Industrial Average rose 263.24 points (0.49%) to close at a new high, marking its fifth consecutive positive session. However, the broader S&P 500 dipped 0.17%, ending a four-day winning streak, while the tech-heavy Nasdaq Composite dropped 0.83%. In early Thursday trading, Dow futures added 113 points (0.21%), S&P 500 futures climbed 0.15%, but Nasdaq 100 futures were down 0.19%.
The previous day's U.S. market rally was buoyed by strong earnings and renewed AI enthusiasm, notably driven by Nvidia's more than 3% surge after Elon Musk announced SpaceX would exclusively use Nvidia chips for its AI infrastructure. This helped propel the Dow to its record. Conversely, tech stocks broadly pulled back as investors engaged in profit-taking, impacting shares of Advanced Micro Devices and Alphabet.
Katherine Bordlemay, Goldman Sachs Asset Management co-head of Americas client portfolio management, commented on the earnings landscape, telling CNBC's 'Closing Bell: Overtime' that 'Earnings are getting bigger, they're getting broader... More encouraging is the breadth. We're seeing double-digit earnings growth coming from almost all sectors in the S&P.' She added that the debate over AI's return on investment is being answered by 'hyperscalers' showing 'yes,' with expanding margins and continuing backlogs supporting future earnings.
Beyond corporate performance, investors have been encouraged by nascent signs of easing tensions in the Middle East, contributing to a recent cooling trend in oil prices. However, inflation remains a key concern for policymakers. Federal Reserve Governor Lisa Cook stated on Wednesday that she is 'prepared to act' with an interest rate hike if sustained disinflationary trends do not materialize, warning that 'The longer inflation is above target, the more likely this scenario becomes.'
Looking ahead, Wall Street anticipates a busy Thursday for earnings, with Warner Bros. Discovery reporting before the opening bell, followed by Airbnb and Lyft after market close. Additionally, weekly jobless claims data is due Thursday morning, preceding July's crucial payrolls report on Friday.
Further Market Developments:
SoftBank Beats Profit Expectations on Intel, ByteDance Gains
Japanese conglomerate SoftBank reported fiscal first-quarter net profit of 347.3 billion yen ($2.2 billion), significantly surpassing analyst estimates. This beat was largely fueled by an $8.2 billion investment gain from its stake in Intel, while an increase in ByteDance's valuation also bolstered its Vision Fund division. Despite the strong performance against expectations, profit declined by nearly 18% year-on-year.
European Stocks Edge Higher; Tech Stabilizes After Asia Sell-Off
European markets opened mostly positive, with the pan-European Stoxx 600 index gaining 0.2%. London's FTSE 100 was up 0.1%, France's CAC 40 added 0.6%, while Germany's DAX was slightly down 0.1%. Tech stocks in Europe showed stabilization, largely avoiding the broader sell-off seen in Asian tech names earlier.
Gold Rises on Weak Payrolls, Hopes for Hormuz Reopening
Gold prices reached their highest level since late June, with spot gold touching $4,295 per ounce. This rally was attributed to weaker-than-expected private payrolls data from ADP, which reported only 44,000 new workers in July. The subdued jobs report lessens the probability of a September Fed rate hike, typically supportive for non-yielding gold. Hopes for a reopening of the Strait of Hormuz also contributed to the metal's gains.
Oil Slips Amid Hopes for U.S.-Iran Deal
Oil prices dipped as investors considered signs of progress in Iran-Oman talks, potentially paving the way for a broader U.S.-Iran peace agreement. Brent crude futures for October delivery fell 0.34% to $79.18 a barrel, and U.S. West Texas Intermediate futures for September delivery dropped 0.52% to $74.83. Iran's Deputy Foreign Minister indicated the U.S. was 'ready to return to commitments' while denying direct negotiations, likely referencing an interim understanding from June.
DBS Shares Surge to Record High on Strong Q2 Earnings
Shares of DBS, Southeast Asia's largest bank, climbed 2.3% to a record high of 75.2 Singapore dollars after the bank reported a record second-quarter net profit of S$3.08 billion ($2.41 billion), a 9% year-on-year increase. The strong performance was driven by higher wealth management and fee income, offsetting lower interest margins.
TikTok to Lay Off 250 Employees, Close Nashville Office
TikTok's U.S. joint venture is reportedly laying off 250 employees and closing its Nashville office by October 5th. The company cited a need to 'streamline our operations and better align our teams for long-term growth.' The Nashville office had occupied nearly 145,000 square feet in the city's music district.
Mainland China and Hong Kong Indexes Open Lower as Asia Markets Decline
Hong Kong's Hang Seng index fell 1.79%, while mainland China's CSI 300 declined 0.7%, reflecting broad losses across Asian markets. Real estate and financial stocks led the drop in Hong Kong.
Asian Tech Stocks Track Wall Street's Pullback
Asian technology stocks mirrored declines in their U.S. counterparts. In Japan, SoftBank Group dropped 4.57%, Tokyo Electron fell over 5%, and Advantest lost 4.66%. South Korean chipmakers SK Hynix and Samsung Electronics also saw declines of 6.67% and 2.85%, respectively, continuing a trend of high volatility in the semiconductor sector.
Japan's Nikkei 225 and South Korea's Kospi Open Lower
Asia-Pacific markets opened mixed, with Japan's Nikkei 225 slipping 0.51% and South Korea's Kospi dropping 1.84%. Australia's S&P/ASX 200, however, added 0.1%.
Nikkei 225 Chicago Futures Slip Amid Mideast Developments Watch
Japanese Nikkei 225 Chicago futures indicated a lower open for Asia-Pacific markets as investors monitor progress on a potential U.S.-Iran deal to reopen the Strait of Hormuz. The Chicago futures contract was at 65,885, below the index's previous close of 66,300.44. Hong Kong Hang Seng index futures also indicated a decline.
SpaceX Lock-Up Expiration Looms, Shares Drop Post-Earnings
A significant event for Elon Musk's SpaceX is the expiration of insider lock-up provisions on Thursday, allowing insiders to sell 20% of their eligible shares (up to 911.5 million shares). This follows a more than 13% drop in SpaceX shares on Wednesday after its first public earnings report revealed a sixfold surge in capital expenditures to $18.4 billion in Q2, largely allocated to artificial intelligence infrastructure. Despite the drop, SpaceX shares were trading 2% higher in after-hours trading.
Key Movers in Extended Trading
Several companies saw notable movements in after-hours trading following earnings reports:
- AppLovin: Tanked almost 16% as its third-quarter adjusted EBITDA projections of $1.71 billion to $1.74 billion fell short of the $1.75 billion StreetAccount consensus. Q2 revenue also narrowly missed estimates.
- Western Digital: Shares slumped over 10% after current-quarter projections for adjusted earnings of $4 a share (plus or minus 15 cents) on $4.1 billion revenue (plus or minus $100 million) underwhelmed traders, who had forecast $3.81 a share on $4.04 billion in revenue.
