S&P 500 Futures Steady as Big Tech Rebounds, Oil Dips Below $100
US equity futures on Friday were little changed, indicating stocks are poised to steady from the deepest one-day drop in a month, as Brent crude prices fell below $100 a barrel and a selloff in Big Tech shares eased.
Futures contracts tied to the S&P 500 Index were up 0.3% as of 8:21 a.m. in New York. Nasdaq 100 futures edged up 0.2%, boosted by Intel Corp.’s 2.9% rise premarket after the chipmaker delivered a revenue forecast that shattered Wall Street estimates as booming data center spending fuels a long-awaited turnaround. The S&P 500 is 0.7% lower this week, while the Nasdaq 100 is down 0.5%.
US stocks were supported by a retreat in bond yields from this year’s peaks while Brent oil prices pulled back to around $98 a barrel after shooting up to their highest since May. An exchange-traded fund tracking chipmakers was little changed ahead of the opening bell as Intel’s results highlighted both the durability of artificial-intelligence related demand, as well as the success of the company’s turnaround.
Tesla Inc. recovered, rising 0.8% premarket, after plunging nearly 15% on Thursday after reporting a profit tumble. Alphabet Inc. also drifted 0.4% higher after dropping 7.1% a day earlier, as an increase in its capital-expenditure outlook fanned fears about the sustainability of AI spending. Nvidia Corp. was flat, while Meta Platforms Inc. and Apple Inc. steadied, after a basket of the Magnificent Seven companies wiped out $797 billion in market value on Thursday.
“Corporate fundamentals have been strong across multiple sectors,” wrote Mike Dickson, head of research at Horizon Investments. “That strength is prompting investors to look beyond the recent big winners and reallocate assets to overlooked areas of the market with lower valuations.”
Elsewhere, Amkor Technology Inc. rallied 12% premarket after the company announced a $1.5 billion agreement with Nvidia to develop advanced semiconductor packaging and test technologies for next-generation AI and accelerated computing platforms. And Oracle Corp. rose 2.2% after the company won a 10-year contract by the US Department of Defense.
Another big test for stocks arrives next week, with more than a third of stocks in the S&P 500 by market value reporting results — the busiest stretch this earnings season. Investors will get a closer look at how AI-related spending is reshaping the tech industry when Microsoft Corp. and Meta Platforms Inc. report after the closing bell next Wednesday, followed by Amazon.com Inc. and Apple Inc. next Thursday.
Executives so far have been expressing optimism about future earnings despite a growing list of worries around geopolitics, the Federal Reserve’s interest-rate path and the payoff from massive AI investments. Tenet Healthcare Corp. soared 15% after the hospital operator boosted its profit guidance for the full year, following better-than-expected results in the second quarter.
Despite Friday’s rebound, equities are still lower for the week under the pressure of rising oil prices, which is threatening to reaccelerate inflation and has boosted bets the Federal Reserve could raise interest rates later this year, with central bank policymakers set to meet next week.
Meantime, American Express Co. fell 4.6% premarket after the credit-card issuer reported second-quarter revenue and net card fees that came in just below expectations.
Stock markets are pricing in a scenario where everything goes right, leaving investors uncompensated for mounting risks, according to Sebastian Raedler, head of European equity strategy at Bank of America Corp. Investor expectations for profit margins, five-year forward earnings growth and other metrics are at all-time highs, while risk premia are at 20-year lows, Raedler said in a Bloomberg Television interview.
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