S&P 500 gains steam: Futures signal optimism post-record high

Wall Street news: US stock index futures rose on Monday, indicating further momentum in the S&P 500 after chip and megacap stocks drove the benchmark index to a record high last week, while corporate earnings and clues on rate cuts continued to top investors' radar.

Wall Street's main indexes stalled at the start of 2024 after the prior year's stellar run, as investors reassessed a quicker start to interest-rate cuts in light of mixed economic data and Federal Reserve policymakers playing down such bets.

A rally in chip stocks followed bullish forecasts from Taiwan's TSMC and Super Micro Computer last week, and heavyweight technology stocks steered the S&P 500 to a record high of 4,842.07 points and an all-time closing high of 4,839.81 points on Friday, confirming a bull market since its October 2022 closing low.

The Philadelphia SE Semiconductor index and the S&P 500 information technology index have jumped nearly 5 per cent so far in January, among the top sectoral gainers, hitting all-time highs last week.

Nvidia gained 1.0 per cent in premarket trading after hitting its highest level on Friday, while Marvell Technology, Qualcomm and Micron Technology climbed over 1 per cent each.

Megacaps Alphabet, Meta Platforms and Tesla also gained between 0.9 per cent and 1.0 per cent.

"Investors increasingly view these stocks as 'bulletproof' because even if the global economy loses steam, demand for AI products will still remain elevated, shielding corporate profits from any macroeconomic headwinds," said Marios Hadjikyriacos, senior investment analyst at XM.

Meanwhile, big-ticket earnings later this week from Netflix, Tesla, Abbott Laboratories, Intel and Johnson & Johnson, among others, will be keenly watched for insights into the health of corporate America.

United Airlines Holdings, Brown & Brown and Zions Bancorp are set to detail their earnings after market close.

So far, 84.6 per cent of the S&P 500 companies that have reported results have surpassed earnings expectations, LSEG data showed on Friday, compared with the 93.1 per cent beat seen in the previous week.

On the economic data front this week, personal consumption expenditure (PCE)- the Fed's preferred inflation gauge, S&P Global PMI readings and an advance fourth-quarter GDP print will be crucial in assessing the central bank's next policy decision when it meets next week.

Traders have sharply pared bets on an at least 25-basis-point rate cut in March, currently standing at 46 per cent, according to the CME Group's FedWatch Tool, from the over 80 per cent chances seen by 2023-end.

At 7:09 am ET, Dow e-minis were up 61 points, or 0.16 per cent, S&P 500 e-minis were up 16.5 points, or 0.34 per cent, and Nasdaq 100 e-minis were up 113.5 points, or 0.65 per cent.

Among others, Boeing lost 1.5 per cent after the US Federal Aviation Administration recommended airlines operating the company's 737-900ER jets inspect door plugs to ensure they are properly secured.

Renewable energy firm SolarEdge gained 2.7 per cent on plans to lay off about 16 per cent of its global workforce.

B Riley Financial tumbled 13.5 per cent after a report said US authorities are investigating the wealth manager's deals with a client who was linked to a securities fraud, and the use of his assets to help the investment bank obtain a loan from Nomura Holdings.

Crypto stocks like Coinbase, Bitfarms and Riot Platforms lost over 2.1 per cent as bitcoin prices declined.

(With Reuters inputs.)