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Futures rally as Big Tech extends recovery
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Futures rally as Big Tech extends recovery
Aug 7, 2024 3:48 AM

(Reuters) - U.S. stock index futures jumped on Wednesday as risk appetite returned after a steep selloff earlier in the week, with sentiment also getting a boost from cautious comments on interest-rate hikes by an influential Bank of Japan policymaker.

Big technology stocks extended their rebound, rising more than 1% in premarket trading.

Wall Street's main indexes ended Tuesday with healthy gains after comments from Federal Reserve officials eased worries of a U.S. recession following weak economic data last week.

The spotlight shifted back to earnings. Super Micro Computer fell 12.7% after reporting quarterly adjusted gross margin below estimates. Rival Dell Technologies ( DELL ) dropped 2.4%.

Airbnb slid 16% after the company forecast third-quarter revenue below estimates and warned of shorter booking windows, suggesting travelers were waiting until the last minute to book due to economic uncertainty.

At 5:12 a.m. ET, U.S. S&P 500 E-minis were up 55.5 points, or 1.05%, with 212,861 contracts changing hands, Nasdaq 100 E-minis were up 220.5 points, or 1.21%, Dow E-minis were up 310 points, or 0.79%

Bank of Japan (BOJ) Deputy Governor Shinichi Uchida said in a speech to business leaders that the central bank would not raise interest rates when financial markets are unstable.

The BOJ rate hike on July 31 sparked a global stocks rout as the yen surged and investors unwound sharp positions of the currency carry trades that fund high-yielding assets.

"The silver lining is that, while the current volatility might be painful, a reset after a period of excessive optimism could lead to a healthier market," said Oliver Blackbourn, portfolio manager-multi-asset team at Janus Henderson.

"It's important to understand that a soft landing is being questioned but is not out of the question, meaning economic resilience and declining interest rates could ultimately help to lift risk assets again."

Wall Street's fear gauge, the CBOE Volatility Index, was down at 23.43 points, from a peak of 65.73 on Monday.

The markets now await more commentary on monetary policy from U.S. central bank officials next week, in the run-up to the Jackson Hole event where Fed Chair Jerome Powell is scheduled to speak.

Among other movers, Boeing rose 1.5% on plans to make design changes to prevent a future mid-air cabin panel blowout like the one in an Alaska Airlines 737 MAX 9 flight in January.

Amgen fell 4.0% after the drugmaker said second-quarter profit slipped 1% as higher expenses offset a 20% increase in revenue.

Rivian dropped 6.3% after forecasting that production would not rise this year and said deliveries in the third quarter would be slightly lower.

(Reporting by Shubham Batra in Bengaluru; Editing by Sriraj Kalluvila)

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