S&P 500 and Nasdaq futures climbed on Monday as memory-chip makers steadied after recent weakness. Investors are now waiting on Federal Reserve minutes due Wednesday and the start of second-quarter earnings later in the week.
S&P 500 and Nasdaq futures pushed higher on Monday, extending last week's rally as chip stocks stabilized and traders positioned ahead of Federal Reserve minutes and the start of second-quarter earnings. The move built on a week that carried the Dow to a record.
At 07:24 a.m. ET, S&P 500 E-minis rose 33.5 points, or 0.44%, while Nasdaq 100 E-minis gained 324.25 points, or 1.1%. Dow E-minis fell 23 points, or 0.04%, after the Dow closed at a record high on Thursday during a holiday-shortened week, putting it within reach of 53,000, a level it has never touched.
Chip stocks find their footing
Semiconductors, among the market's biggest drivers this year, had lost momentum, yet they steadied before the bell. Memory-chip makers Western Digital, Seagate and Micron Technology rose 3.2%, 2.2% and 2.3%, respectively.
The main indexes had gained even as chips weakened, and investors took comfort from recent strength in healthcare, industrials and financials as a sign the rally may be broadening beyond the chip and AI trade. Even so, the sector's valuations remain in question. According to Reuters, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said this week investors will keep asking about technology valuations, "or whether this is another great bubble – like railways or dot-com – waiting to burst,"
New listings kept the AI theme in view. South Korean chipmaker SK Hynix is set to launch a U.S. listing on Monday to raise about $28 billion, according to regulatory filings. Separately, SpaceX added 1.7% in premarket trading, with the company set to join the Nasdaq 100 on Tuesday.
Earnings and the Fed in focus
Second-quarter earnings season gathers pace later this month, with Delta Air Lines and PepsiCo expected to report later in the week. S&P 500 companies are expected to grow earnings 24.4% year-over-year in the quarter, according to data compiled by LSEG.
Federal Reserve policy stays central as investors reassess the interest-rate path. Traders now see a 24% chance of a 25-basis-point rate hike at the July 29 meeting, down from about 30% a week earlier, according to CME's FedWatch tool. For September, markets price about a 44% chance of one quarter-point hike, compared with 48.3% a week ago.
Those bets eased slightly on Thursday after a cooler-than-expected jobs report. Minutes from last month's meeting — the first under new Chair Kevin Warsh — are due on Wednesday, and the ISM services survey later on Monday is expected to ease slightly to 54.0.
Source: Reuters
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