Tech Stocks May Lead Initial Advance On Wall Street

(RTTNews) - Today, major U.S. index futures are set to open higher on Thursday as technology stocks help Wall Street post early gains.

Shares of tech-intensive Nasdaq Nvidia ( NVDA ) could benefit from a rally, with the chipmaker rising 11.4 percent in premarket trading.

Nvidia's jump comes after the company posted better-than-expected fourth-quarter results and strong earnings guidance for the current quarter.

The semiconductor sector could also benefit from gains in shares of Intel ( INTC ), which rose 1.4 percent in premarket trade after Morgan Stanley upgraded its rating on the company's stock.

However, concerns about the interest rate outlook may still linger in the market as traders digest the minutes of the Federal Reserve's latest meeting.

The minutes given by the Fed were not surprising, but the central bank reiterated that it will continue to raise interest rates to combat inflation.

With the Fed wary of the effects of a tightening labor market, the negative sentiment may be in response to a Labor Department report showing an unexpected drop in US jobless claims for the week ended February 18.

Stocks showed a lack of direction during the trading day on Wednesday, after sharp declines in the previous session. The major averages bounced along unchanged lines throughout the day before finally closing mixed.

The Nasdaq rose 14.77 points, or 0.1%, to 11,507.07, the S&P 500 gained 6.29 points, or 0.2%, to 3,991.05 and the Dow gained 84.50 points, or He lost 0.3. Up to 33,045 items.

The Dow and S&P 500 returned to their lowest closing levels in a month with small daily declines.

Wall Street had a slightly mixed ending after the release of the minutes of the Federal Reserve's Jan. 31-Feb. 1 monetary policy meeting.

The minutes revealed that "some participants" preferred a 50 basis point increase in rates to the 25 basis point hike announced as a result.

"Participants in favor of a 50-basis-point increase indicated that a larger increase would bring the target range closer to what they believed to be a fairly impressive position, with a faster, more timely view of the risks to price stability," the Fed said.

Fed members eventually agreed to raise the target range for the federal funds rate by 25 basis points to 4.50 percent to 4.75 percent.

The small rate hike comes after the central bank raised rates by 75 basis points in November and 50 basis points in December.

The minutes indicated that all participants expected further rate hikes consistent with the Fed's twin goals of maximum long-term employment and 2 percent inflation.

The minutes acknowledged that inflationary pressures had eased, but noted that while inflation remained above the Fed's 2 percent target, a tight labor market was putting upward pressure on wages and prices.

"Overall, the minutes continue to underline the FOMC's continued hawkish stance, as its primary goal is to significantly reduce inflation," said Kathy Bostjancic, chief economist at Nationwide.

And he added: "And this requires economic growth to be below potential growth, which is expected to be around 1.8% over a period of time."

With the Fed's next monetary policy meeting scheduled for March 21-22, CME Group's FedWatch tool indicates a 79.0 percent chance of a 25 basis point rate hike and a 21.0 percent chance of a 50 percent rate hike.

Most major sectors ended the day with modest movements, underperforming the market.

Oil services stocks were sharply lower, but the Philadelphia Oil Services Index fell 2.7 percent to its lowest close in a month. Oil service reserves were sold on the back of a sharp drop in crude oil prices.

There was also significant weakness among gold stocks, reflected by a 2.2 percent drop in the NYSE Arca Gold Bug Index. While precious metal prices were little changed, gold stocks fell sharply.

Meanwhile, natural gas stocks performed strongly on the back of rising commodity prices, with the NYSE Arca Natural Gas Index rising 1.2 percent.

Chemical stocks also posted strong gains, with the S&P Chemicals sector index rising 1.2 percent after trading at its lowest close in months on Tuesday.

Commodities, currency markets

Crude oil futures were down $2.41 at $73.95 a barrel on Wednesday, down $0.89 at $74.84. Meanwhile, gold futures were down $1 in the previous session at $1,841.50 an ounce, and down $11.20 at $1,830.30 an ounce.

On the currency front, the US dollar traded at 135.26 yen, compared with 134.84 yen in New York trading on Wednesday. Against the euro, the dollar was at $1.0603, compared to $1.0605 yesterday.

Asia

Asian stocks ended on a mixed note on Thursday, as the US Federal Reserve's latest interest rate policy guidance showed few surprises.

The dollar weakened after two days of strength, helping gold and oil prices trade on a stronger note in Asian trade.

Japanese markets are closed on the emperor's birthday. China's Shanghai Composite index fell 0.1 percent to 3,287.48.

Hong Kong's Hang Seng index fell 0.4 percent to 20,351.35 as investors reacted to the FOMC minutes, which signaled members were determined to tackle inflation with more rate hikes.

Shares in Seoul rose after the Bank of Korea kept interest rates unchanged after more than a year of steady increases to combat persistent inflation.

The Kospi ended up 0.9 percent at 2,439.09. Samsung Electronics gained 1.5 percent, Hyundai Motors 1.1 percent, Kia Motors 2.6 percent and SK Hynix slightly more than 4 percent.

Australian markets extended losses for a third straight session as lower commodity prices weighed on mining and energy stocks.

Australian business investment rose to a seven-year high in December, narrowing the decline after data showed a boost in retail and residential spending.

The benchmark S&P/ASX 200 index was down 0.4 per cent at 7,285.40, while the broader Common Index was down 0.3 per cent at 7,492.50.

Mining giant Rio Tinto fell 1.7 percent after predicting a 41 percent drop in 2022 profit and cutting its dividend.

Qantas fell 6.8 percent, even though the airline turned a profit in the first half after three years affected by the pandemic.

Europe

European stocks were mostly up after some surprises in the minutes of the Federal Reserve's latest meeting on Thursday.

After releasing the minutes of the US central bank's January 31-February 1 policy meeting, the Fed is pricing in three-quarters more rate hike futures at its next meeting this year.

Germany's DAX rose 0.6 percent and France's CAC 40 index added 0.4 percent, while Britain's FTSE 100 index fell 0.1 percent.

ASM International, BE Semiconductor and Axtron rose after US semiconductor maker Nvidia reported first-quarter earnings that topped Wall Street estimates.

Advertising group WPP also rose sharply after forecasting next year's sales to beat analysts' expectations.

Engineering firm Rolls-Royce Holdings rose after forecasting higher revenue and profit growth in 2023.

Groupe SEB, the conglomerate that makes small appliances, also rose after increasing the group's operating margin for the 2023 financial year.

Telecom and web content provider Freenet AG rose after reporting 7.0 percent EBITDA growth in fiscal 2022.

Meanwhile, defense firm BAE Systems turned negative in FY22 even as earnings and core sales improved.

Hiring at Hayes also fell after reporting a drop in half-year profits and citing tougher terms to take on permanent roles.

Luxury eyewear manufacturer Essilor Luxottica has filed for bankruptcy in Paris. The company is striking a cautious tone for 2023 after reporting fourth-quarter earnings growth.

Reinsurers in Munich are reeling from a tough year for the industry despite very strong annual profits.

Healthcare stocks were also lower in London, with AstraZeneca and GSK showing significant dividend losses.

Similarly, lenders Barclays and Standard Chartered were in the red on ex-dividend buybacks.

US Economic Reports

The Labor Department unexpectedly released a report on Thursday showing that initial claims for unemployment benefits in the United States fell slightly in the week ending February 18.

Initial jobless claims fell by 3,000 to 192,000 from the previous week's revised level of 195,000, the report said.

The drop surprised economists who had expected jobless claims to rise to 200,000 last week.

Meanwhile, the four-week moving average rose to 191,250, up 1,500 from the previous week's revised average of 189,750, the report said.

Recent data released by the Commerce Department showed that the US economy grew slightly less than previously estimated in the fourth quarter of 2022.

Real gross domestic product rose 2.7 percent in the fourth quarter, compared with growth of 2.9 percent reported earlier, the report said. Economists expect GDP growth to remain unchanged.

The Commerce Department said the better-than-expected growth mainly reflected a downward revision in consumer spending.

Atlanta Federal Reserve President Rafael Bostick will speak at 10:50 a.m. ET is taking part in a discussion about the Fed's role in the banking industry ahead of the Federal Reserve Bank's Banking Outlook 2023 conference in Atlanta.

The Energy Information Administration will release its report on oil inventories for the week ending February 17 at 11:00 a.m. ET.

Crude oil inventories are expected to rise by 1.2 million barrels, after rising 16.3 million barrels the previous week.

The Treasury Department will release the results of its $35 billion seven-year note auction later this month at 1 p.m. ET.

Stocks are the focus

Alibaba ( BABA ) shares rose sharply in premarket trading after the Chinese e-commerce giant reported better-than-expected quarterly results.

Online craft marketplace Etsy ( ETSY ) is also expected to gain early momentum after reporting fourth-quarter revenue that missed analysts' estimates.

Meanwhile, shares of Lucid Motors ( LCID ) saw significant premarket weakness after the electric car maker reported fourth-quarter earnings that missed expectations.

Department store chain Bath & Body Works ( BBWI ) may be under pressure after reporting better-than-expected fourth-quarter results but disappointing guidance.

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