Tech Stocks May Lead Initial Advance On Wall Street [Real-Time Trader]

India, Feb. 23 -- The major U.S. index futures are currently pointing to a higher open on Thursday, with tech stocks likely to help lead an initial advance on Wall Street.

The tech-heavy Nasdaq is likely to benefit from a surge by shares of Nvidia (NVDA), as the chipmaker is soaring by 11.4 percent in pre-market trading.

The spike by Nvidia comes after the company reported better than expected fourth quarter results and provided upbeat revenue guidance for the current quarter.

The semiconductor sector may also benefit from an advance by shares of Intel (INTC), with the industry giant climbing by 1.4 percent in pre-market trading after Morgan Stanley upgraded its rating on the company's stock.

Concerns about the outlook for interest rates may continue to hang over the markets, however, as traders digest the minutes of the latest Federal Reserve meeting.

The Fed minutes offered few surprised but reiterated that the central bank will continue to raise interest rates in its battle against inflation.

With the Fed warning about the impact of labor market tightness, some negative sentiment may be generated in reaction to a Labor Department report showing an unexpected dip in first-time claims for U.S. unemployment benefits in the week ended February 18th.

After ending the previous session sharply lower, stocks showed a lack of direction over the course of the trading day on Wednesday. The major averages spent the day bouncing back and forth across the unchanged line before eventually closing mixed.

While the Nasdaq crept up 14.77 points or 0.1 percent to 11,507.07, the S&P 500 edged down 6.29 points or 0.2 percent to 3,991.05 and the Dow dipped 84.50 points or 0.3 percent to 33,045.09.

With the modest decreases on the day, the Dow and the S&P 500 once again fell to their lowest closing levels in a month.

The narrowly mixed close on Wall Street came following the release of the minutes of the Federal Reserve's January 31-February 1 monetary policy meeting.

The minutes revealed a "few participants" favored raising rates by 50 basis points compared to the 25 basis point rate hike that was ultimately announced.

"The participants favoring a 50-basis point increase noted that a larger increase would more quickly bring the target range close to the levels they believed would achieve a sufficiently restrictive stance, taking into account their views of the risks to achieving price stability in a timely way," the Fed said.

The Fed members eventually agreed to raise the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent.

The smaller rate hike came after the central bank raised rates by 75 basis points in November and by 50 basis points in December.

The minutes noted all participants continued to anticipate that ongoing rate increases would be appropriate to achieve the Fed's dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.

The minutes acknowledged that inflationary pressures have moderated but noted price growth remains well above the Fed's 2 percent target, with labor market tightness contributing to continuing upward pressures on wages and prices.

"Overall, the minutes continued to underscore that the FOMC maintains a hawkish posture as its main goal is to significantly lower inflation," said Nationwide Chief Economist Kathy Bostjancic.

She added, "And this requires economic growth to be below its potential growth rate, which is estimated to be around 1.8%, for some period of time."

The Fed's next monetary policy meeting is scheduled for March 21-22, with CME Group's FedWatch Tool currently indicating a 79.0 percent chance of another 25 basis point rate hike and a 21.0 percent chance of a 50 basis point rate hike.

Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets.

Oil service stocks showed a substantial move to the downside, however, with the Philadelphia Oil Service Index plunging by 2.7 percent to its lowest closing level in well over a month. The sell-off by oil service stocks came amid a steep drop by the price of crude oil.

Considerable weakness was also visible among gold stocks, as reflected by the 2.2 percent slump by the NYSE Arca Gold Bugs Index. Gold stocks fell sharply even as the price of the precious metal was little changed.

On the other hand, natural gas stocks turned in a strong performance amid a spike by the price of the commodity, driving the NYSE Arca Natural Gas Index up by 1.2 percent.

Chemical stocks also showed a notable move to the upside, with the S&P Chemical Sector Index climbing by 1.2 percent after ending Tuesday's trading at its lowest closing level in over a month.

Commodity, Currency Markets

Crude oil futures are climbing $0.89 to $74.84 a barrel after plunging $2.41 to $73.95 a barrel on Wednesday. Meanwhile, after edging down $1 to $1,841.50 an ounce in the previous session, gold futures are sliding $11.20 to $1,830.30 an ounce.

On the currency front, the U.S. dollar is trading at 135.26 yen versus the 134.84 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0603 compared to yesterday's $1.0605.

Asia

Asian stocks ended on a mixed note Thursday as the latest guidance on interest rate policy from the U.S. Federal Reserve showed few surprises.

The dollar weakened after two days of gains, helping gold and oil prices trade on a firm note in Asian trading.

Japanese markets were closed for the Emperor's birthday. China's Shanghai Composite Index slipped 0.1 percent to 3,287.48 after choppy trading.

Hong Kong's Hang Seng Index ended 0.4 percent lower at 20,351.35 as investors responded to the FOMC minutes showing members are committed to fighting inflation with additional rate hikes.

Seoul stocks rose notably as the Bank of Korea kept interest rates unchanged after steadily raising them for over a year to tackle persistently high inflation.

The Kospi gained 0.9 percent to finish at 2,439.09, led by tech heavyweights and automakers. Samsung Electronics rose 1.5 percent, Hyundai Motor added 1.1 percent, Kia Motors surged 2.6 percent and SK Hynix jumped a little over 4 percent.

Australian markets extended losses for a third straight session as lower commodity prices weighed on mining and energy stocks.

The downside remained capped after data showed Australian business investment rose to a seven-year high in the December quarter, helped by a jump in spending on retail and accommodation.

The benchmark S&P/ASX 200 Index dropped 0.4 percent to 7,285.40, while the broader All Ordinaries Index ended 0.3 percent lower at 7,492.50.

Mining giant Rio Tinto gave up 1.7 percent after reporting a 41 percent drop in profits in 2022 and slashing its dividend.

Qantas plunged 6.8 percent despite the airline swinging to a profit for its first half after three pandemic-impacted years.

Europe

European stocks have moved mostly higher Thursday after the minutes from the latest Federal Reserve meeting contained few surprises.

Following the release of the minutes from the U.S. central bank's Jan 31-Feb 1 policy meeting, Fed funds futures now price in three more quarter-percentage-point rate hikes at upcoming meetings this year.

The German DAX Index is up by 0.6 percent and the French CAC 40 Index is up by 0.4 percent, although the U.K.'s FTSE 100 Index has bucked the uptrend and edged down by 0.1 percent.

ASM International, BE Semiconductor and Aixtron have jumped after U.S. semiconductor maker Nvidia forecast first-quarter revenue above Wall Street estimates.

Advertising group WPP has also moved sharply higher after it forecast sales above analyst expectations in the coming year.

Engineering firm Rolls-Royce Holdings has also soared after reporting higher profit and forecasting more profit growth in 2023.

Groupe SEB, a consortium that produces small appliances, has also jumped after forecasting an increase in Group operating margin for fiscal 2023.

Freenet AG, a telecommunications and web content provider, has also risen after posting EBITDA growth of 7.0 percent in financial year 2022.

Meanwhile, defense company BAE Systems has moved to the downside despite reporting a rise in underlying profit and sales in FY22.

Recruiter Hays has also fallen after reporting a decrease in half-year profit and flagging rough conditions in its recruitment of permanent roles.

French luxury eyewear maker Essilor Luxottica has also tumbled in Paris. After reporting an increase in fourth-quarter revenues, the company struck a cautious tone for 2023.

Reinsurer Munich Re has also plunged despite delivering a surprisingly strong annual profit in a difficult year for the industry.

Healthcare stocks are also trading lower in London, with AstraZeneca and GSK posting notable losses on going ex-dividend.

Likewise, lender Barclays and Standard Chartered have moved to the downside on going ex-dividend.

U.S. Economic Reports

The Labor Department released a report on Thursday unexpectedly showing a slight drop in first-time claims for U.S. unemployment benefits in the week ended February 18th.

The report said initial jobless claims edged down to 192,000, a decrease of 3,000 from the previous week's revised level of 195,000.

The dip surprised economists, who had expected jobless claims to inch up to 200,000 from the 194,000 originally reported for the previous week.

Meanwhile, the report said the less volatile four-week moving average crept up to 191,250, an increase of 1,500 from the previous week's revised average of 189,750.

Revised data released by the Commerce Department showed the U.S. economy grew by slightly less than previously estimated in the fourth quarter of 2022.

The report said real gross domestic product jumped by 2.7 percent in the fourth quarter compared to the previously reported 2.9 percent surge. Economists had expected GDP growth to be unrevised.

The Commerce Department said the slower than previously estimated growth primarily reflected a downward revision to consumer spending.

At 10:50 am ET, Atlanta Federal Reserve President Raphael Bostic is due to participate in a conversation on the Fed's Role in the Banking Industry before the Federal Reserve Bank of Atlanta's 2023 Banking Outlook Conference.

The Energy Information Administration is scheduled to release its report on oil inventories in the week ended February 17th at 11 am ET.

Crude oil inventories are expected to increase by 1.2 million barrels after surging by 16.3 million barrels in the previous week.

The Treasury Department is due to announce the results of this month's auction of $35 billion worth of seven-year notes at 1 pm ET.

Stocks In Focus

Shares of Alibaba (BABA) are moving sharply higher in pre-market trading after the Chinese e-commerce giant reported better than expected quarterly results.

Online crafts marketplace Etsy (ETSY) is also likely to see initial strength after reporting fourth quarter revenues that exceeded analyst estimates.

On the other hand, shares of Lucid Motors (LCID) are seeing significant pre-market weakness after the electric vehicle maker reported fourth quarter revenue that fell short of expectations.

Bath shop chain Bath & Body Works (BBWI) may also come under pressure after reporting better than expected fourth quarter results but providing disappointing guidance.

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