The major U.S. index futures are indicating a lower opening on Thursday, suggesting that stocks may relinquish some of the gains observed in the prior session. The downward momentum on market is partly indicative of a negative response to earnings news from Walmart. Walmart’s fourth quarter results surpassed analyst expectations; however, the retail behemoth offered earnings guidance for the current year that fell short of projections. Negative sentiment could be exacerbated by a sustained increase in crude oil prices, driven by apprehensions regarding a potential military conflict between the U.S. and Iran. However, the futures regained some ground following the release of a report from the Labor Department indicating that first-time claims for U.S. unemployment benefits decreased significantly more than anticipated in the week ending February 14th. Equities exhibited a robust upward trajectory in the initial trading hours on Wednesday, subsequently relinquishing some of those gains as the session progressed. The major averages retraced significantly from their session peaks yet concluded the day solidly in positive territory.
Following the modest gains observed in Tuesday’s session, the Nasdaq increased by 175.25 points, representing a rise of 0.8 percent, reaching a level of 22,753.63. Meanwhile, the S&P 500 saw an uptick of 38.09 points, or 0.6 percent, bringing it to 6,881.31, and the Dow experienced an increase of 129.47 points, equivalent to 0.3 percent, closing at 49,662.66. The early strength on market was driven by a significant surge in shares of Nvidia following the announcement of a multi-year, multi-generational strategic partnership with Facebook parent Meta, which encompasses on-premises, cloud, and AI infrastructure. The company announced that the partnership will facilitate the extensive deployment of Nvidia CPUs alongside millions of Nvidia Blackwell and Rubin GPUs. Nvidia experienced a notable increase of up to 2.9 percent before retreating from its peak levels, ultimately finishing the day with a gain of 1.6 percent. Shares of Micron surged by 5.3 percent following the announcement that David Tepper’s Appaloosa Management has augmented its stake in the chipmaker by 200 percent. Positive sentiment may also have been generated in response to some encouraging U.S. economic data, including a report from the Federal Reserve indicating that industrial production rose more than anticipated in January.
However, equities retreated from their peaks after the publication of the minutes from the Federal Reserve’s most recent monetary policy meeting, which indicated that officials continue to hold divergent views on the trajectory of interest rates. The minutes from the Federal Reserve’s meeting on January 27-28 indicated that several participants believed additional rate cuts would likely be warranted should inflation decrease in accordance with their projections. Nonetheless, some held the view that it would be prudent to maintain rates at their current levels for “some time” while the Fed meticulously evaluates the forthcoming data. A number of these participants assessed that further policy easing might not be justified until there was unequivocal evidence that the trajectory of disinflation was securely reestablished, the Fed stated. The Fed observed that several participants endorsed a two-sided characterization of the outlook for rates, indicating that rate hikes may be warranted should inflation persist above target levels.
As crude oil prices surged, oil service stocks delivered some of the market’s strongest performances, culminating in a 2.7 percent increase in the Philadelphia Oil Service Index. Gold stocks experienced notable strength as the price of the precious metal surged, propelling the NYSE Arca Gold Bugs Index upward by 2.5 percent. Oil producers, along with financial and transportation stocks, exhibited robust performances, whereas interest rate-sensitive utilities and commercial real estate stocks experienced declines.