Scott Olson
Stock index futures erased overnight losses Thursday as some buying appetite came in for Nvidia (NVDA) following the initial selloff after its results.
S&P futures (SPX) +0.3%, Nasdaq 100 futures (US100:IND) +0.4% and Dow futures (INDU) +0.5% rose.
The VIX (VIX) -6% was lower following a 10% pop overnight.
Nvidia was off 2% after being down as much as 7% overnight despite beating forecasts and issuing solid guidance.
Rates were little changed. The 10-year Treasury yield (US10Y) fell 1 basis point to 3.83%. The 2-year yield (US2Y) was flat at 3.87%.
The “10yr (Secured Overnight Financing Rate), now at 3.4%, is already overshooting to the downside,” ING said. “It can get as low as 3% as the rate cutting gets going. But there is little relative value sense to it breaking below 3%, as the Fed itself is not discounted to break below 3%.”
“If or when the 10yr gets to that type of level, we expect it to spark a journey back up to 4%. That journey should begin around the turn of the year, at the very latest.”
On the economic front, Q2 GDP revisions arrive before the bell. Weekly jobless claims hit at the same time, with economists expecting no change at 232K.
Any GDP revisions “would add to the uncertainty when it comes to tomorrow’s core PCE print for July, so that could have implications for the 25bps vs 50bps debate depending how that looks,” Deutsche Bank’s Jim Reid said. “As of this morning, futures are placing a 35% probability on a 50bp rate cut in September, so the view remains that 25 is more likely. But it’s far from a done deal, and we’ve still got both the jobs report and CPI release for August before that meeting, so plenty of time for that to shift around still.”
