Tech Stocks May Lead Early Rebound On Wall Street

The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to regain ground after trending lower over the past few sessions.

Technology stocks may help lead an early rebound on Wall Street, as reflected by the 1.2 percent jump by the Nasdaq 100 futures.

Shares of Alphabet (GOOGL) are surging by 5.0 percent in pre-market trading after a report from Bloomberg said Apple (AAPL) is in talks to build Google’s Gemini artificial intelligence engine into the iPhone.

Nvidia (NVDA) is also seeing significant pre-market strength ahead of its GTC Conference, where the chipmaker is expected to provide updates on its AI initiatives.

Overall trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy meeting on Tuesday and Wednesday.

The Fed is widely expected to leave interest rates unchanged, but the central bank’s accompanying statement and economic projections could have a significant impact on the outlook for rates.

Recent hotter-than-expected inflation readings have reduced optimism about the likelihood of the Fed’s first rate cut coming in June.

With traders looking ahead to the Fed meeting, stocks moved mostly lower over the course of the trading session on Friday. With the downward move, the Nasdaq and the S&P 500 closed lower for the third straight day.

The major averages finished the day off their worst levels but still firmly negative. The Nasdaq slumped 155.36 points or 1.0 percent to 15,973.17, the S&P 500 slid 33.39 points or 0.7 percent to 5,117.09 and the Dow fell 190.89 points or 0.5 percent to 38,714.77.

For the week, the tech-heavy Nasdaq declined by 0.7 percent, while the S&P 500 edged down by 0.1 percent and the Dow was nearly unchanged.

The weakness on Wall Street partly reflected concerns about the outlook for interest rates ahead of the Fed’s monetary policy meeting.

On the U.S. economic front, a report released by the Labor Department showed import prices in the U.S. increased in line with economist estimates in the month of February.

The Labor Department said import prices rose by 0.3 percent in February after climbing by 0.8 percent in January. The uptick matched expectations.

Meanwhile, the report said export prices advanced by 0.8 percent in February following an upwardly revised 0.9 percent increase in January.

Economists had expected export prices to edge up by 0.2 percent compared to the 0.8 percent growth originally reported for the previous month.

The Fed also released a report showing a slight increase in U.S. industrial production in the month of February, with manufacturing and mining output recovering from weather-related declines in January

The Fed said industrial production inched up by 0.1 percent in February after falling by a downwardly revised 0.5 percent in January.

Economists had expected industrial production to come in unchanged compared to the 0.1 percent dip originally reported for the previous month.

Meanwhile, preliminary data released by the University of Michigan unexpectedly showed a slight deterioration in U.S. consumer sentiment in the month of March.

The report said the consumer sentiment index edged down to 76.5 in March after falling to 76.9 in February. Economists had expected the index to come in unchanged.

Year-ahead and long-run inflation expectations remained unchanged from the previous month at 3.0 percent and 2.9 percent, respectively.

The Federal Reserve Bank of New York also released a report showing New York manufacturing activity has contracted at a significantly accelerated rate in the month of March.

Software stocks saw substantial weakness on the day, with the Dow Jones U.S. Software Index plunging by 2.7 percent after ending Thursday’s session at its best closing level in over a month.

Adobe (ADBE) led the sector lower, plummeting by 13.7 percent after reporting better than expected fiscal first quarter results but providing disappointing revenue guidance for the current quarter.

Considerable weakness also emerged among computer hardware stocks, as reflected by the 1.2 percent loss posted by the NYSE Arca Computer Hardware Index.

Retail stocks also showed a notable move to the downside on the day, dragging the Dow Jones U.S. Retail Index down by 1.2 percent.

Commodity, Currency Markets

Crude oil futures are rising $0.28 to$81.32 a barrel after slipping $0.22 to $81.04 a barrel last Friday. Meanwhile, after edging down $6 to $2,161.50 an ounce in the previous session, gold futures are inching up $4.40 to $2,165.90 an ounce.

On the currency front, the U.S. dollar is trading at 149.13 yen versus the 148.04 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0901 compared to last Friday’s $1.0889.

Asia

Asian stocks ended mostly higher on Monday as Chinese industrial output and retail sales figures beat estimates and investors looked ahead to a slew of central bank decisions.

The dollar held steady, while the yen wavered ahead of the Fed, BOJ, RBA, SNB, and BOE meetings due this week. Gold dipped, while oil ticked higher, building on last week’s gains amid signs of tightening supplies.

Chinese markets ended higher as mixed economic data helped to keep hopes for stimulus alive. The benchmark Shanghai Composite Index jumped 1.0 percent to 3,084.93, while Hong Kong’s Hang Seng Index inched up 0.1 percent to close at 16,737.12.

The latest readings on Chinese industrial output, retail sales and fixed asset investment for the first two months of 2024 beat forecasts.

On the contrary, property investment declined, unemployment unexpectedly rose and new bank loans data for February disappointed – adding to expectations that policymakers will announce more stimulus to stabilize growth in the world’s second-largest economy.

Japanese markets led regional gains, tracking a weaker yen as investors braced for a BOJ policy shift when the central bank makes its policy announcement on Tuesday.

The central bank is widely expected to end its negative interest rates and yield curve control policies after this year’s spring wage negotiations involving major Japanese firms delivered robust pay increases.

The Nikkei 225 Index soared 2.7 percent to 39,740.44, shrugging off new data that showed Japan’s core machinery orders fell more than expected in January.

The broader Topix Index settled 1.9 percent higher at 2,721.99. Gainers were led by real estate, machinery and insurance issues.

Honda Motor rose 2.7 percent and Nissan Motor added 4.1 percent after they signed a strategic pact to collaborate on developing electric vehicles.

Seoul stocks rose notably ahead of the Fed meeting on Tuesday and Wednesday. The Kospi climbed 0.7 percent to 2,685.84, led by tech shares and battery makers. SK Hynix, LG Energy Solution and Samsung SDI surged 2-4 percent.

Australian markets fluctuated before finishing marginally higher ahead of the Reserve Bank of Australia’s interest rate decision due on Tuesday.

No change in interest rates is expected, but the central bank is expected to maintain its hawkish stance, citing sticky inflation.

Miners declined as iron ore fell below $100 a ton in Singapore to its lowest level since last May.

Europe

European shares are modestly higher on Monday following key Eurozone inflation data and ahead of the Fed and Bank of England policy meetings due this week.

Eurozone inflation softened as estimated in February largely reflecting the decline in energy prices, final data from Eurostat showed.

The harmonized index of consumer prices, or HICP, posted an annual increase of 2.6 percent after rising 2.8 percent in January. The rate matched the flash estimate published on March 1.

The U.K.’s FTSE 100 Index, the German DAX Index and the French CAC 40 Index have all risen by 0.2 percent

Signify NV has moved sharply higher after Barclays upgraded its rating on the Dutch lighting company’s stock to Overweight from Underweight.

Electronics retailer Currys has also shown a significant move to the upside after raising its profit guidance.

British American Tobacco has also risen. The company started a £1.6 billion ($2 billion) buyback program after selling part of its stake in India’s ITC.

British Land Company has also jumped after it announced the formation of a new 50:50 joint venture with Royal London Asset Management Property to boost the delivery of 1 Triton Square into a best-in-class science and innovation building at Regent’s Place.

German reinsurer Hannover Re is marginally higher after it posted higher full-year net income and forecast improved results for FY24.

On the other hand, Swiss tech firm Logitech has moved sharply lower after announcing the departure of its CFO in May.

British building materials group Marshalls has also plunged after annual pretax profit and revenue fell amid challenging end-market conditions.

Julius Baer Group has also shown a notable move to the downside after announcing its financial targets for the 2023-25 period.

U.S. Economic Reports

The National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of March at 10 am ET. The housing market index is expected to come in unchanged in March after rising to 48 in February.

Stocks In Focus

Shares of HashiCorp (HCP) are moving sharply in pre-market trading after a report from Bloomberg said the software company has been considering options including a sale.

Beverage giant PepsiCo (PEP) may also move to the upside after Morgan Stanley upgraded its rating on the company’s stock to Overweight from Equal-Weight.

Shares of Super Micro Computer (SMCI) are also seeing pre-market strength as the information technology company is added to the S&P 500.