Dow Jones futures rose slightly Thursday morning, along with S&P 500 futures and Nasdaq futures. The Dow Jones, S&P 500 index and Nasdaq composite reversed to close lower Wednesday after Federal Reserve Chairman Jerome Powell said “some asset prices” are high. Chip stocks are once again breaking and testing key technical levels, though Nvidia (NVDA) got a late boost. President Donald Trump held a news conference after the close, speaking on everything from the Fed to Canada trade to the Brett Kavanaugh nomination.
Dow Jones futures were a fraction above fair value. S&P 500 futures rose nearly 0.1%. Nasdaq 100 futures climbed 0.2%. Remember that overnight action doesn’t necessarily translate into actual trading in the next regular session.
The 10-year Treasury yield pulled back to about 3.04%. Crude oil futures continued to rise.
During his 80-minute news conference, President Trump said he rejected a one-on-one meeting with Canada Prime Minister Justin Trudeau to try to break a deadlock in U.S.-Canada Nafta trade talks. He said Canada has treated the U.S. “very badly” with its “too high” tariffs. He threatened to slap the country with auto tariffs.
The U.S. plans to issue the text of its Mexico-only trade pact on Friday, according to reports.
Trump also said he wasn’t happy with the latest Fed rate hike Wednesday afternoon, continuing a recent trend of criticizing the central bank. But he said the Fed is raising rates because the U.S. economy is so strong.
The president also said sexual assault charges vs. Supreme Court nominee Kavanaugh are a “con job,” though he implied he could change his mind after Thursday’s showdown Senate Judiciary Committee hearing.
The major indexes initially rose to session highs following the expected Fed rate hike, but then fell after Chairman Powell indicated that stock prices are too expensive.
Semiconductor stock groups were among the worst performers Wednesday, helped by fresh chip-equipment downgrades. The Philadelphia Semiconductor index fell nearly 1%, approaching its 200-day line. On Tuesday, the Philly Sox index sold off, closing just below its 50-day line.
The Philly Sox’s relative strength line, which tracks its performance vs. the S&P 500 index, is approaching 52-week lows once again.
Chip stocks have struggled in 2018. Semiconductors usually take part or lead stock market rallies, given their weight in the broader indexes as well as their importance in so many products.
While AMD (AMD) has soared this year, Intel (INTC), Micron (MU) and many others have not. That includes Apple (AAPL) chipmakers such as Broadcom (AVGO), even as Apple stock has powered above a $1 trillion market cap.
The graphics-chip maker fell 0.6% to 266.92 on Wednesday. That’s just below a 269.30 flat-base buy point and slightly above the 50-day line. Nvidia rose a fraction in overnight trade to 267.68.
On Wednesday, Bernstein remained bullish on Nvidia despite being gloomy on the chip sector broadly. Three analysts have backed Nvidia stock this week.
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