US stock futures opened higher at the start of Asian trading on Thursday as risk sentiment turned positive following a sharp jump in sales forecasts from Nvidia Corp., the world’s most valuable chipmaker.
(Bloomberg) — US stock futures opened higher at the start of Asian trading on Thursday as risk sentiment turned positive following a sharp jump in sales forecasts from Nvidia Corp., the world’s most valuable chipmaker.
Nasdaq 100 futures rallied 1.6%, following a 0.5% drop in the underlying index Wednesday amid concerns over the debt-ceiling impasse in the US and the risk of another rate hike from the Federal Reserve. Contracts for the S&P 500 jumped 0.6%.
Before the late news from Nvidia, whose shares surged around 27% in after-hours trading, major Asia equity indexes had looked likely to decline on Thursday, with futures lower for Hong Kong, Japan and Australia. Nvidia reported that booming demand for artificial intelligence processors would fuel revenue growth, with the after-hours stock action indicating a gain of around $200 billion to its market capitalization.
The S&P 500 fell 0.7% on Wednesday, led by losses in financials and real estate, as negotiations over the US debt ceiling continued without a deal. Minutes from the Fed’s meeting in early May showing policymakers were split on the path for US interest rates further knocked sentiment.
Selling in US government debt pushed 10-year Treasury yield five basis points higher to a level not seen since the depths of the banking crisis in March.
Yields on short-dated Treasuries pushed higher as investors demanded a higher premium on debt coming due after June 1 — the date Treasury Secretary Janet Yellen has said the US was likely to begin missing debt payments. Those maturing June 6 rose above 6.6% on Wednesday while those maturing May 30 are yielding around 3%.
The Bank of Korea hands down its latest policy decision Thursday, with economists anticipating the central bank will hold rates for a third consecutive meeting against the backdrop of persistent inflation and slowing growth. Bank Indonesia is also expected to hold rates when it meets Thursday.
Debt Talks
JPMorgan Chase & Co. Chief Economist Michael Feroli said the odds of US debt talks going past June 1 are 25% and rising. However, Nomura’s Charlie McElligott said he believes a “positive outcome” is getting closer, with traders selling in waves of profit-taking ahead of the Treasury secretary’s deadline.
“Any relief rally on a debt-ceiling ‘deal’ headline into the start of next week then has the potential to act as a local top for stocks for a bit, with most of the ‘wall of worry’ blood already squeezed from the stone,” McElligott said.
Key events this week:
- Fed issues minutes of May 2-3 policy meeting, Wednesday
- Bank of England Governor Andrew Bailey speaks, Wednesday
- US initial jobless claims, GDP, Thursday
- Interest rate decisions in Turkey, South Africa, Indonesia, South Korea, Thursday
- Tokyo CPI, Friday
- US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.6% as of 7:19 a.m. Tokyo time. The S&P 500 fell 0.7%
- Nasdaq 100 futures rose 1.6%. The Nasdaq 100 fell 0.5%
- Nikkei 225 futures fell 0.1%
- Australia’s S&P/ASX 200 Index futures fell 0.4%
- Hang Seng Index futures fell 0.1%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro was little changed at $1.0743
- The Japanese yen was little changed at 139.42 per dollar
- The offshore yuan was little changed at 7.0640 per dollar
- The Australian dollar was little changed at $0.6540
Cryptocurrencies
- Bitcoin was little changed at $26,392.28
- Ether fell 0.1% to $1,802.65
Bonds
- The yield on 10-year Treasuries advanced five basis points to 3.74%
Commodities
- West Texas Intermediate crude fell 0.2% to $74.18 a barrel
This story was produced with the assistance of Bloomberg Automation.
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