Wall St set for higher open as chip stocks bounce back after selloff


WALL Street's main indexes eyed a higher open on Thursday as chip stocks rebounded, while investors awaited commentary from Federal Reserve officials to ascertain the outlook for interest-rate cuts.

Micron Technology rose 1.6% after a report that the memory-chip maker is set to get more than $6 billion in grants from the U.S. Commerce Department to help pay for domestic chip factory projects.

Other chip-related stocks such as Advanced Micro Devices , Nvidia and Broadcom gained between 0.4% and 1.3% in premarket trading.

The gains follow a more than 3% drop in the Philadelphia Semiconductor Index on Wednesday. It was also down nearly 13% from the record high levels seen last month amid receding bets on rate cuts.

"Generally, fundamentals will be supportive of chip stocks, but also after such a strong rally, it's not unusual to see a bit of profit-taking," said Fiona Cincotta, senior market analyst at City Index.

All three major indexes closed lower in the last session, with the S&P 500 and the Nasdaq logging their fourth straight day of losses as investors remained jittery about the Fed's interest-rate outlook.

Cleveland Fed President Loretta Mester said she expected price pressures to ease further this year, allowing the central bank to cut borrowing costs, but only when it is "pretty confident" about inflation heading sustainably to its 2% goal.

Fed Governor Michelle Bowman said progress on lowering U.S. inflation may have stalled. She said it remained an open question whether interest rates were high enough to ensure a return to the 2% inflation target.

"If we have a look at data at the moment, I don't think there is anything that really screams the Fed needs to be cutting rates right now," Cincotta said.

Investors will keenly listen to remarks from New York Fed President John Williams and his Atlanta counterpart Raphael Bostic later in the day.

On the data front, the number of Americans filing new claims for unemployment benefits for the week ended April 13 came in at 212,000 against a forecast of 215,000 as per economists polled by Reuters.

At 8:34 a.m. ET, Dow e-minis were up 48 points, or 0.13%, S&P 500 e-minis were up 4.25 points, or 0.08%, and Nasdaq 100 e-minis were up 20.5 points, or 0.12%.

D.R. Horton rose 3.8% after the U.S. homebuilder raised its annual revenue forecast as tight housing supply boosted sales.

Alaska Air Group gained 2.8% after forecasting current-quarter profit above estimates.

Elevance Health

added 3.1% after the health insurer reported quarterly profit above Wall Street estimates and slightly raised its annual earnings forecast.

Las Vegas Sands Corp lost 3.6% after brokerages cut their price targets on the casino operator due to weakness in its Macau operations.

Tesla slipped 2.5% after Deutsche Bank downgraded its rating on the stock to "hold" from "buy". - Reuters

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

   

Next In Business News

Australia central bank pondered raising rates on higher inflation risks
Star shares plunge as investors doubt validity of takeover bid by Hard Rock
SunCon remains on a growth trajectory
Ringgit falls, comments by Fed officials dampen rate cut hopes
Feytech's shares leap 37.5% on Main Market debut
Bursa ekes out slight gain as rally slows
Trading ideas: Hong Leong Bank, MAHB, Capital A, FGV, Coastal, SunCon, Binastra, Annum, Bright, Sunview
Oil eases on worries about US inflation, interest rates
US stocks mixed amid cautious Fed comments, gold shines
Improved progress billings to drive Kerjaya growth

Others Also Read