December Nasdaq 100 E-Mini futures (NQZ25) are trending up +0.30% this morning as optimism over artificial intelligence was reinforced by Alibaba’s pledge to boost spending and an upbeat forecast from Micron Technology.
U.S.-listed shares of Alibaba Group (BABA) surged over +9% in pre-market trading after the Chinese e-commerce giant announced it would boost AI spending beyond its initial $53 billion target and released its largest AI language model to date. Also, Micron Technology (MU) rose over +1% in pre-market trading after the largest U.S. maker of computer memory chips posted upbeat FQ4 results and issued above-consensus FQ1 guidance.
In yesterday’s trading session, Wall Street’s major indexes closed lower. The Magnificent Seven stocks retreated, with Amazon.com (AMZN) sliding over -3% to lead losers in the Dow and Nvidia (NVDA) falling more than -2%. Also, Vistra Corp. (VST) dropped over -6% and was among the top percentage losers on the S&P 500 after Jefferies downgraded the stock to Hold from Buy. In addition, Firefly Aerospace (FLY) plunged more than -15% after the rocket developer posted weaker-than-expected Q2 results. On the bullish side, McKesson (MCK) climbed over +6% after the healthcare services company raised its FY26 adjusted EPS guidance.
Economic data released on Tuesday showed that the U.S. S&P Global manufacturing PMI fell to 52.0 in September, weaker than expectations of 52.2. Also, the U.S. September S&P Global services PMI fell to 53.9, weaker than expectations of 54.0. In addition, the U.S. Richmond Fed manufacturing index unexpectedly fell to -17 in September, weaker than expectations of -5.
Fed Chair Jerome Powell said on Tuesday that risks remain for both the labor market and inflation, reiterating that policymakers likely face a difficult path ahead as they consider additional rate cuts. “Near-term risks to inflation are tilted to the upside and risks to employment to the downside — a challenging situation,” Powell said. The Fed chief did not indicate whether he might support a rate cut at the central bank’s next meeting.
“Powell doesn’t want to antagonize the White House, but he’s not rolling over either,” said David Russell at TradeStation. “He’s keeping his options open in case price pressures increase. Powell’s not trying to sound hawkish, but he’s trying to dodge some of the forceful demand for aggressive cuts.”
Also speaking on Tuesday, Chicago Fed President Austan Goolsbee said policymakers should remain cautious about further rate cuts as inflation is above the central bank’s target and rising. Atlanta Fed President Raphael Bostic echoed remarks from his Chicago counterpart, saying he anticipates more inflation coming. At the same time, Fed Governor Michelle Bowman said, “Now that we have seen many months of deteriorating labor market conditions, it is time for the FOMC to act decisively and proactively to address decreasing labor market dynamism and emerging signs of fragility.”
Meanwhile, U.S. rate futures have priced in a 94.1% chance of a 25 basis point rate cut and a 5.9% chance of no rate change at the October FOMC meeting.
Today, investors will focus on U.S. New Home Sales data, which is set to be released in a couple of hours. Economists, on average, forecast that August new home sales will stand at 650K, compared to 652K in July.
U.S. Crude Oil Inventories data will also be released today. Economists expect this figure to be 0.8 million, compared to last week’s value of -9.3 million.
In addition, market participants will be anticipating a speech from San Francisco Fed President Mary Daly.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.110%, down -0.24%.
The Euro Stoxx 50 Index is down -0.29% this morning, mirroring Tuesday’s Wall Street losses as investors remain cautious after comments from Fed Chair Jerome Powell. Financial and healthcare stocks underperformed on Wednesday. Limiting losses, defense stocks climbed after U.S. President Donald Trump said Kyiv could win back “all of Ukraine” and described Russia as a “paper tiger.” Meanwhile, a survey released on Wednesday showed that German business sentiment unexpectedly declined in September, adding to mounting concerns for Europe’s largest economy. Companies surveyed were less satisfied with current conditions and more pessimistic about their outlook, with both manufacturing and services showing deterioration. “Prospects for an economic recovery have suffered a setback,” Ifo President Clemens Fuest said. In corporate news, Lanxess AG (LXS.D.DX) slumped over -6% after Deutsche Bank downgraded the stock to Hold from Buy.
Germany’s Ifo Business Climate Index was released today.
The German September Ifo Business Climate Index came in at 87.7, weaker than expectations of 89.3.
Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.83%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.30%.
China’s Shanghai Composite Index closed higher today, supported by strong gains in chip stocks, while new signs of easing trade tensions between the world’s two largest economies also boosted sentiment. Semiconductor stocks rallied on Wednesday after Morgan Stanley upgraded its view on the sector and Huawei announced plans to overtake Nvidia in AI chips. Meanwhile, China said on Tuesday that it will no longer pursue new special treatment for developing countries in current and future World Trade Organization negotiations, according to state-run Xinhua News Agency. Maybank analysts said in a note, “This essentially removes a point of contention between the U.S. and China and provides some sign of the two sides trying to improve relations with each other.” In other news, national broadcaster CCTV reported that China’s market regulator is launching a series of measures to curb excessive competition in the meal delivery arena, including setting a cap on restaurant fees and requiring more transparency in subsidy and discounting campaigns. In corporate news, Alibaba Group surged over +9% in Hong Kong after the e-commerce giant announced it would increase AI spending beyond its initial $53 billion target and unveiled its largest AI language model to date.
Japan’s Nikkei 225 Stock Index reversed early losses and closed higher today, notching a new record high. Strength in technology stocks lent support to the overall market on Wednesday. OpenAI, Oracle, and SoftBank Group announced plans on Tuesday to build five new AI data centers in the U.S. as part of their expansive Stargate project. Defense stocks also gained ground after U.S. President Donald Trump said NATO members should shoot down Russian aircraft that entered their airspace. Preliminary business surveys released on Wednesday showed that Japan’s manufacturing activity contracted at the fastest pace in six months in September, driven by continued declines in new orders, while the country’s services sector continued to expand, though at a slower pace. Annabel Fiddes, economics associate director at S&P Global Market Intelligence, said, “The surveys suggest that the service sector remains a key growth engine, and saw a further solid increase in activity, which helped to offset a deepening reduction in manufacturing production.” Meanwhile, Japanese government bonds rose on Wednesday as investors weighed the economic policies of the frontrunners to become the country’s next prime minister. Sanae Takaichi, a candidate to become Japan’s first female prime minister, said on Tuesday that the government should issue more JGBs if needed to counter household inflation. At the same time, Shinjiro Koizumi, another candidate, said the government should finance spending packages through expected tax revenue gains and spending cuts. Investors now await Tokyo inflation data and the Bank of Japan’s July meeting minutes for fresh monetary policy clues. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.20% to 24.42.
The Japanese September au Jibun Bank Manufacturing PMI (preliminary) stood at 48.4, weaker than expectations of 49.5.
Pre-Market U.S. Stock Movers
Amazon.com (AMZN) gained more than +1% in pre-market trading after Wells Fargo upgraded the stock to Overweight from Equal Weight with a price target of $280.
Micron Technology (MU) rose over +1% in pre-market trading after the largest U.S. maker of computer memory chips posted upbeat FQ4 results and issued above-consensus FQ1 guidance.
ServiceNow (NOW) advanced more than +2% in pre-market trading after Morgan Stanley upgraded the stock to Overweight from Equal Weight with a price target of $1,250.
Lithium Americas (LAC) jumped more than +63% in pre-market trading after Reuters reported that the Trump administration was seeking an equity stake of up to 10% in the company.
Adobe (ADBE) fell over -1% in pre-market trading after Morgan Stanley downgraded the stock to Equal Weight from Overweight.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - September 24th
Cintas (CTAS), Uranium Energy (UEC), Thor Industries (THO), KB Home (KBH), H B Fuller (FUL), Steelcase (SCS), Worthington Steel (WS), Stitch Fix (SFIX).
