Thursday saw an uptick in S&P 500 and Nasdaq futures as semiconductor stocks began to recover from recent declines, while market participants looked forward to insights from Federal Reserve officials regarding potential interest rate adjustments amid strong economic indicators.
Premarket activity highlighted gains for semiconductor companies including Advanced Micro Devices (AMD, Financial), Nvidia (NVDA, Financial), and Applied Materials (AMAT, Financial), with increases ranging from 0.3% to 0.7%.
Micron Technology (MU, Financial) saw a notable rise of 1.7% following news reports of a substantial $6 billion grant from the U.S. Commerce Department, aimed at supporting the company's domestic chip manufacturing initiatives.
After a more than 3% drop on Wednesday, the Philadelphia Semiconductor Index has experienced a nearly 13% fall from its peak last month, indicating significant volatility in the sector.
Meanwhile, a slight decrease in Treasury yields from their recent highs has provided some relief to the equity markets. The 10-year Treasury note yield was last recorded at 4.5772%.
The previous trading session ended in the red for all major indexes, marking the fourth consecutive day of losses for both the S&P 500 and Nasdaq, as concerns linger over the Federal Reserve's direction on interest rates.
Cleveland Fed President Loretta Mester expressed optimism about decreasing price pressures allowing for a reduction in borrowing costs, contingent upon confidence in achieving the Fed's 2% inflation target. Conversely, Fed Governor Michelle Bowman raised concerns about a potential stall in progress towards reducing inflation, leaving open the question of whether current interest rates are sufficient to meet the 2% target.
Further comments are anticipated from New York Fed President John Williams and Atlanta Fed President Raphael Bostic, which could provide additional market direction.
According to the CME FedWatch Tool, there's a more than 46% chance that the Fed will begin lowering interest rates by July, highlighting market expectations for monetary policy adjustments.
Early trading saw Dow e-minis slightly up by 4 points, or 0.01%, S&P 500 e-minis increased by 3.5 points, or 0.07%, and Nasdaq 100 e-minis rose by 26.5 points, or 0.15%.
Attention is also turning to the upcoming earnings reports from KeyCorp, Comerica, and D.R. Horton, set to be released before the market opens, alongside key economic data including weekly jobless claims and March existing home sales figures.
