US pre-open: Markets to snap losing streak as Nvidia rebounds
By Benjamin Chiou
Date: Tuesday 25 Jun 2024
(Sharecast News) - US stock futures were pointing to small gains in pre-market trade with the S&P 500 and Nasdaq set to rebound after three straight days of losses.
Both indices have been on the retreat since hitting fresh record highs on 18 June on the back of a sharp drop in the share price of Nvidia as investors took profits following the stock's eye-watering rise so far this year. Nvidia futures however were up 2.6% early on having dropped 13% over the past three sessions.
"With Nvidia having seen its market capitalisation rise from $1.2 trillion to $3.4 trillion in less than six-months, traders have grown increasingly uncomfortable with the market's over-reliance on a single stock," said Joshua Mahony, chief market analyst at IG.
"Nonetheless, the recent weakness seen for Nvidia and the semiconductor space has ultimately helped drive a rotation into the rest of the market, helping to improve the breadth and perceived stability of the S&P 500."
S&P 500 futures were rising 0.2% while he Nasdaq gained 0.4%. The Dow Jones Industrial Average, however, was down 0.1% ahead of the opening bell, with heavyweight Boeing trading lower.
A Boeing plane operating a Korean Air flight heading for Taiwan dropped 25,000 feet in five minutes after a fault with its pressurisation system, adding to more woes for the American aircraft manufacturer.
Meanwhile, US prosecutors recommended overnight that the Department of Justice bring criminal charges against Boeing for violating a settlement related to two fatal crashes in 2018 and 2019.
Also weighing on sentiment in the aerospace sector was an update from French giant Airbus which slashes its full-year earnings and delivery targets as a result of a "degraded operating environment".
Meanwhile, FedEx, Carnival and Progress Software will be in focus on Tuesday ahead of their quarterly earnings.
In economic data, investors will be watching the release of the Chicago Fed National Activity Index and the Richmond Fed Manufacturing Index, along with the S&P/Case-Shiller Home Price Indices and the national consumer confidence survey.
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