Nvidia May Lead Early Upward Move On Wall Street

The major U.S. index futures are currently pointing to a higher open on Thursday, with stocks likely to move the upside as trading resumes following the Juneteenth holiday on Wednesday.

A notable advance by shares of Nvidia (NVDA) may contribute to early strength on Wall Street, as the AI darling is surging by 3.7 percent in pre-market trading.

Nvidia shot up by 3.5 percent during trading on Tuesday, surpassing Microsoft (MSFT) as the world’s most valuable public company.

The futures remained positive after the Labor Department released a report showing a modest pullback by first-time claims for U.S. unemployment benefits in the week ended June 15th.

The Labor Department said initial jobless claims dipped to 238,000, a decrease of 5,000 from the previous week’s revised level of 243,000.

Economists had expected jobless claims to fall to 235,000 from the 242,000 originally reported for the previous week.

Meanwhile, a separate report released by the Commerce Department unexpectedly showed a steep drop in new residential construction in the U.S. in the month of May.

Following the strong upward move seen over the course of Monday’s session, stocks turned in a relatively lackluster performance during trading on Tuesday. Despite the choppy trading, the S&P 500 and the Nasdaq once again reached new record closing highs.

The major averages all finished the day modestly higher. The S&P 500 climbed 13.80 points or 0.2 percent to 5,487.03, the Dow rose 56.76 points or 0.2 percent to 38,834.86 and the Nasdaq inched up 5.21 points or less than a tenth of a percent to 17,862.23.

The choppy trading on Wall Street came following the release of a mixed batch of U.S. economic data, with reports on retail sales and industrial production telling two separate stories.

The Commerce Department released a report showing retail sales crept up by 0.1 percent in May after dipping by a revised 0.2 percent in April.

Economists had expected retail sales to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month.

Excluding an increase in sales by motor vehicle and parts dealers, retail sales edged down by 0.1 percent in May after slipping by a revised 0.1 percent in April.

Economists had expected ex-auto sales to climb by 0.2 percent, matching the increase originally reported for the previous month.

“Retail sales came in really light this morning and while that may be good news for inflation hawks, it could be the beginning of a slowdown in growth, which would hurt a lot more than a couple of interest rate cuts would help,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

Meanwhile, the Federal Reserve released a separate report showing industrial production increased by much more than expected in the month of May.

The Fed said industrial production jumped by 0.9 percent in May after coming in unchanged in April. Economists had expected industrial production to rise by 0.3 percent.

While most of the major sectors showed only modest moves, gold stocks saw considerable strength amid an increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 1.5 percent.

Significant strength was also visible among semiconductor stocks, with the Philadelphia Semiconductor Index climbing by 1.4 percent to a record closing high.

Banking and computer hardware stocks also saw some strength on the day, while housing stocks saw notable weakness, dragging the Philadelphia Housing Sector Index down by 1.6 percent.

Commodity, Currency Markets

Crude oil futures are inching up $0.06 to $81.63 a barrel after jumping $1.24 to $81.57 a barrel on Tuesday. Meanwhile, after climbing $17.90 to $2,346.90 an ounce in the previous session, gold futures are rising $6.30 to $2,353.20 an ounce.

On the currency front, the U.S. dollar is trading at 158.44 yen versus the 158.09 yen it fetched on Wednesday. Against the euro, the dollar is valued at $1.0721 compared to yesterday’s $1.0744.

Asia

Asian stocks ended mixed on Thursday as France’s political crisis fueled jitters and investors look ahead to a slew of central bank decisions.

The dollar index held steady in Asian trading, while gold and oil prices were higher in the wake of rising geopolitical tensions in Europe and the Middle East.

Chinese markets ended modestly lower as the People’s Bank of China left benchmark lending rates unchanged at a monthly fixing and the central bank governor warned of weaker credit growth.

The benchmark Shanghai Composite Index dropped 0.4 percent to 3,005.44 on concerns about a slowing property market. Hong Kong’s Hang Seng Index fell 0.5 percent to 18,335.32, dragged down by financial and tech stocks.

Japanese shares ended slightly higher, led by chip-related stocks, with Advantest surging 3.7 percent. The Nikkei 225 Index reversed early losses to finish 0.2 percent higher at 38,633.02, while the broader Topix Index settled 0.1 percent lower at 2,725.54.

The yen fluctuated following a five-session drop as data showed Japanese exports rose for a sixth straight month in May.

Seoul stocks eked out modest gains to end higher for a third day running. The Kospi rose 0.4 percent to 2,807.63 – exceeding 2,800 points for the first time in about 2-1/2 years amid gains in the tech sector.

Australian markets ended on a flat note amid diminished hopes for early rate cuts from the country’s central bank.

Namoi Cotton tumbled 4.3 percent after the competition watchdog raised concerns over Olam Agri’s proposed acquisition of the company.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index jumped 0.9 percent to 11,771.81 after data showed the nation’s economy exited a recession with modest expansion in the first quarter.

Europe

European stocks have moved mostly higher on Thursday as the Bank of England retained its key policy rate for the seventh straight session on Thursday.

The Monetary Policy Committee decided to hold the Bank Rate at 5.25 percent again in a split vote. The current bank rate is the highest since early 2008.

Elsewhere, the Swiss National Bank delivered another interest rate cut, reducing its policy rate by 25 basis points to 1.25 percent, as expected by two-thirds of analysts. Norway’s central bank held its key policy rate at 4.5 percent as expected.

While the French CAC 40 Index has advanced by 0.8 percent, the German DAX Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.

Euro zone government bond yields rose as France prepares to sell bonds for the first time since President Emmanuel Macron called for a snap election.

Technology stocks topped the gainers list, with ASM International surging after Morgan Stanley upgraded the stock’s rating to “overweight” from “equal weight.

Germany’s MorphoSys has also climbed after it has entered into a delisting agreement with Novartis BidCo AG and Novartis AG upon closing the acquisition by Novartis in May this year.

Nordex, a provider of wind turbine systems, has also moved to the upside after securing orders for about 172 MW from various customers.

Vallourec, a maker of tubular solutions and pipelines for energy industries, has also gained in Paris after it extended a 2019 contract originally worth around $900 million with the National Oil Company of Abu Dhabi for two years.

Technip Energies has also rallied. The technology company focused on energy and chemical industries said that it has bagged a significant contract from Indian Oil Corporation Limited.

Investment platform CMC Markets has also soared after it reported a 52 percent jump in annual profit and forecast higher operating income for fiscal 2025.

Meanwhile, food group Danone has slumped after announcing it is targeting like-for-like sales growth of 3-5 percent for the 2025 to 2028 period.

Tate & Lyle has also tumbled after the British food ingredients maker agreed to acquire nature-based ingredients provider CP Kelco for $1.8 billion.

U.S. Economic Reports

First-time claims for U.S. unemployment benefits saw a modest pullback in the week ended June 15th, according to a report released by the Labor Department on Thursday.

The Labor Department said initial jobless claims dipped to 238,000, a decrease of 5,000 from the previous week’s revised level of 243,000.

Economists had expected jobless claims to fall to 235,000 from the 242,000 originally reported for the previous week.

Meanwhile, the report said the less volatile four-week moving average rose to 232,750, an increase of 5,500 from the previous week’s revised average of 227,250.

A separate report released by the Commerce Department on Thursday unexpectedly showed a steep drop in new residential construction in the U.S. in the month of May.

The Commerce Department said housing starts plunged by 5.5 percent to an annual rate of 1.277 million in May after surging by 4.1 percent to a revised rate of 1.352 million in April.

Economists had expected housing starts to climb by 0.7 percent to an annual rate of 1.370 million from the 1.360 million originally reported for the previous month.

The report also said building permits slumped by 3.8 percent to an annual rate of 1.386 million in May after tumbling by 3.0 percent to a rate of 1.440 million in April.

Building permits, an indicator of future housing demand, were expected to increase by 0.7 percent to an annual rate of 1.450 million.

The Federal Reserve Bank of Philadelphia also released a report on Thursday showing an unexpected slowdown in the pace of growth by regional manufacturing activity in the month of June.

The Philly Fed said its diffusion index for current general activity fell to 1.3 in June from 4.5 in May, although a positive reading still indicates growth. Economists had expected the index to inch up to 5.0.

Looking ahead, the Philly Fed said most future activity indicators remained positive but suggest less widespread expectations for overall growth over the next six months.

At 11 am ET, the Energy Information Administration is due to release its report on oil inventories in the week ended June 14th.

The Treasury Department is also scheduled to announce the details of this month’s auctions of two-year, five-year and seven-year notes at 11 am ET.

At 4 pm ET, Richmond Federal Reserve President Thomas Barkin is due to speak before the Risk Management Association.

San Francisco Federal Reserve President Mary Daly is scheduled to participate in a panel on “The Transformative Power of AI: How is Technology Changing Our Lives?” in coordination with Syracuse University and the Maxwell School of Citizenship and Public Affairs at 10:15 pm ET.