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PDD Holdings ( PDD ) slumps after quarterly revenue miss
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BJ's Wholesale Club gains after rating upgrade
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Futures up: Dow 0.12%, S&P 500 0.16%, Nasdaq 0.03%
(Updated at 07:21 a.m. ET/1121 GMT)
By Johann M Cherian and Purvi Agarwal
Aug 26 (Reuters) - U.S. stock index futures inched
higher on Monday, with the markets focused on results from
AI-darling Nvidia ( NVDA ) and a key inflation report due later in the
week, while investors remained optimistic about a September rate
cut from the central bank.
Markets welcomed Federal Reserve Chair Jerome Powell's
comments on Friday, when he said "the time has come" to lower
borrowing costs in the light of diminishing upside risk to
inflation and moderating labor demand.
The main indexes rallied more than 1% in the previous
session, with the S&P 500 and the Dow less than 1%
from their respective record highs. Rate-sensitive small caps
logged their strongest day in six week as equities
continued to pare losses from the early-August market rout.
Traders are now betting on either a 25-basis-point or a
50-basis-point rate cut in September. Odds of the former have
dropped to 63.5% from more than 70% in the previous week, while
odds of a 50-bps cut have risen to 36.5% from about 30% last
week, according to the CME Group's Fed Watch tool.
"Employment data of late has been weak... as the inflation
side seems to be under control, the developments in the
employment leg will determine the size of the cuts," said Ipek
Ozkardeskaya, senior analyst at Swissquote Bank.
Attention will turn to the gross domestic product estimates
for the second quarter along with July Personal Consumption
Expenditure data, the central bank's preferred inflation gauge,
due later in the week.
At 7:21 a.m. ET, Dow e-minis were up 49 points, or
0.12%, S&P 500 e-minis were up 9.25 points, or 0.16%,
and Nasdaq 100 e-minis were up 5 points, or 0.03%.
As earnings season draws to a close, chip designer Nvidia ( NVDA )
, whose results are scheduled on Wednesday, traded
nearly 1% higher in premarket trading.
Markets have been less forgiving this quarter of highly
valued megacap stocks, which spearheaded the excitement around
artificial intelligence.
They will scrutinize Nvidia's ( NVDA ) earnings to justify the
stock's more than 160% year-to-date jump, which pushed its
market cap value to No. 2, just below that of Apple ( AAPL ), as
of Friday's close.
"The expectations remain sky-high. Nvidia ( NVDA ) cannot afford any
missteps at current valuations. Everything from the numbers to
guidance should be perfect to the keep the rally going,"
Ozkardeskaya said.
Results from Dell, Salesforce ( CRM ), Dollar
General ( DG ) and Gap are also awaited through the
week.
Comments from San Francisco Fed President Mary Daly, a
Federal Open Market Committee voting member this year, are due
later in the day.
With the geopolitical tensions in the Middle East in the
spotlight, crude prices climbed over 1%.
Among others, U.S.-listed shares of China's PDD Holdings
sank 14.9% after the Temu-owner missed market
expectations for second-quarter revenue.
BJ's Wholesale Club rose 1.0% after brokerage
J.P.Morgan lifted its rating on the club operator to "neutral"
from "underweight".
B Riley Financial ( RILY ) dropped 1.9% after the lender
announced a notification of delinquency with the Nasdaq.