March NASDAQ 100 E-Mini Futures are up by +0.88% this morning, buoyed by a surge in orders for ASML, which has injected new energy into AI trading. ASML Holding’s shares in the U.S. jumped over +6% in pre-market after the Dutch chip equipment manufacturer revealed fourth-quarter net bookings nearly double what analysts had anticipated, while also projecting robust sales growth this year. This positive news seemed to resonate, with Intel and Micron Technology both seeing increases of more than +6% and +4%, respectively. There’s also talk that China has started approving purchases of Nvidia’s H200 AI chips by companies like Alibaba, which is contributing to a more favorable local mood.
Now, investor attention is shifting toward the Federal Reserve’s decisions regarding interest rates and the earnings reports of major tech firms in the U.S. Wall Street’s main indexes wrapped up mixed yesterday, with the S&P 500 even reaching a new all-time high. Corning was among the day’s biggest winners, soaring over 15% after announcing a significant multi-year contract, possibly up to $6 billion, to supply Metaplatform with data center construction materials. Similarly, Micron reported plans to invest another $24 billion in Singapore over the next decade to ramp up manufacturing, which explained its increase as well. On the downside, UnitedHealth Group fell sharply, dropping more than -19%, primarily due to insurance companies forecasting lower revenues for 2026 amidst proposed stability in Medicare plan payments.
Interestingly, the Conference Board’s Consumer Confidence Index dropped to an unexpectedly low 84.5 in January—far below the anticipated 90.6. Meanwhile, the US November S&P/CS HPI Composite – 20 NSA showed a year-on-year increase of +1.4%, which, while better than the forecast of +1.2%, doesn’t completely offset the negative sentiment. The Richmond Fed’s Manufacturing Business Index came in just shy of expectations at -6, compared to the anticipated -5.
“Given this new data, we think the unemployment rate may rise, which could, you know, impact U.S. retail sales soon,” noted Jeff Roach from LPL Financial.
Investors are now keenly awaiting the Federal Reserve’s monetary policies, with many expecting the federal funds rate to remain unchanged at 3.50% to 3.75% after three consecutive cuts up until the end of 2025. This situation might frustrate President Trump, who has been vocal about needing more cuts. Observers are particularly interested in what Chairman Jerome Powell will say during the press conference after the meeting, especially about potential future cuts.
In the midst of the ongoing corporate earnings season, three of the so-called “Magnificent Seven” companies—Microsoft, Meta, and Tesla—are set for announcements. Expected profit growth for these companies is around 20% for the fourth quarter, the slowest since early 2023, which raises pressure for them to demonstrate tangible returns on their hefty investments. Additionally, firms like Lam Research, IBM, and Starbucks are also on the docket for quarterly results today.
On the economic data side, all eyes are on the EIA’s impending weekly crude oil inventory report, with projections estimating a decrease of 200,000 barrels, a stark contrast to last week’s figure of 3.6 million barrels.
In bond markets, the benchmark 10-year US Treasury yield climbed by +0.59% to 4.248%.
Meanwhile, the Euro Stoxx 50 index dipped by -0.10% this morning, ending its two-day upward streak as investors were digesting the latest earnings results. Luxury stocks, particularly LVMH, were hit hard, with their shares dropping over -7% after the owner of Louis Vuitton announced disappointing sales growth for the holiday quarter. On the flip side, technology stocks rallied, encouraged by ASML’s strong quarter performance. A recent survey indicated an expected improvement in German consumer sentiment for February, driven by easing inflation worries and rising income expectations due to this year’s minimum wage hike.
In remarks on Wednesday, ECB Board member François Villeroy de Galhau commented on closely tracking how a weaker dollar might affect eurozone inflation, hinting that policy adjustments may be on the table. Additionally, another ECB member suggested that if the euro continues to want to strengthen, the bank might have to consider further rate cuts to manage inflation expectations effectively.
Germany’s GfK Consumer Climate Index was also published today, and it came in at -24.1, which is better than the forecast of -25.5.
In Asia, stock markets were relatively stable, with China’s Shanghai Composite Index up by +0.27% and Japan’s Nikkei 225 inching up by +0.05%.
Notably, China’s Shanghai index maintained its upward trajectory from the previous session, helped by a surge in non-ferrous metals stocks as gold prices hit a historic high above $5,300 an ounce. AI-related and energy stocks also saw increases. Additionally, the Chinese yuan reached its highest valuation in 32 months against the US dollar, benefiting from government encouragement to appreciate amid global dollar selling and increased demand for seasonal payments from exporters. In corporate developments, China Vanke’s shares rose over 2%, following bondholder approvals to defer repayments. A snack retailer, Busymin Group, surged +69% in its Hong Kong debut after a successful public offering.
In Japan, the Nikkei 225 closed slightly up, thanks largely to tech stocks that rallied in the final half hour of trading. Despite a significant gain in the yen impacting export stocks negatively, technology shares climbed following impressive booking results from ASML. Some support also came from a successful auction of Japan’s 40-year government bonds, which bolstered overall market sentiment.
The minutes from the Bank of Japan’s December meeting underscored the focus on rising inflationary pressures influenced by the weak yen and labor shortages, particularly in discussions about future rate hikes. It appears that some members expressed concerns about how rising import prices might affect underlying inflation, while consensus was found that any rate changes would hinge on future economic conditions and inflation expectations.
Corporate news highlighted SoftBank Group’s stock rising over 3% after a report suggested it’s in discussions to invest an additional $30 billion in OpenAI. Investors will be eager for forthcoming Japanese economic data, including metrics on CPI, industry output, and employment.
Pre-Market US Stock Movers:
ASML’s shares gained over +6% in pre-market trading following strong fourth-quarter bookings that exceeded expectations.
Building on ASML’s performance, Intel and Micron Technology also saw gains, while Nvidia climbed by over +1% on reports of approved imports for H200 AI chips into China.
Seagate Technology surged over 10% after reporting strong second-quarter earnings and optimistic guidance for the next quarter, highlighting an uptick in demand from AI data centers. Texas Instruments rose more than +6% after setting solid first-quarter guidance.
Today’s US Earnings Spotlight:
Microsoft, Meta, Tesla, Lam Research, IBM, and several others are set to announce their quarterly results today. Several stocks, including AT&T, Starbucks, and SoftBank, are also anticipated to reveal their earnings.
