The premarket session in the US on August 23 shows a continued rise in the stock market as investors eagerly await NVIDIA's earnings report. Futures on US stock indices opened with gains, rebounding from yesterday's sell-off in the latter half of the day. This sell-off followed statements from several Fed representatives. S&P 500 futures advanced by 0.3%, while the tech-heavy NASDAQ surged by 0.5%. Today, investors are anticipating a favorable profit report from Nvidia Corp., the chip manufacturer that captured attention in the artificial intelligence arena earlier this year, leading to an upswing in the entire tech sector.
Signs of an accelerating downturn in the Eurozone prompted traders to lower expectations of rate hikes by the European Central Bank this autumn. Recent figures revealed a contraction in service sector activity for the first time since the end of last year, relinquishing its hold on the broader economy. In Germany, the composite PMI showed the fastest decline since the first wave of the pandemic in 2020. The Stoxx 600 index slid, erasing the previous gains.
Investors remain cautious in their decisions ahead of Federal Reserve Chairman Jerome Powell's upcoming speech at the Jackson Hole Economic Policy Symposium on Friday. The robust US economy has pushed many investors to favor the retention of high borrowing costs from the US Federal Reserve. As a result, investors will be seeking clues about the prospects of interest rates following the Fed's recent increase to 5.5%, the highest level in 22 years. Treasury bond yields edged lower on Wednesday, mirroring similar changes in Europe.
Today, PMI reports for the US economy are also anticipated. These indices will indicate whether activity contracted in August or maintained relatively stable growth rates. A sharp drop in the indices could trigger a sell-off in the stock market.
In Asia, China's indices faced renewed pressure despite new signs of recovery in the profits of the country's tech giants. In other markets, oil declined for the third day in anticipation of official US inventory data, scheduled for release later on Wednesday.
As for the S&P 500, demand for the index has returned, providing bulls with an opportunity for correction. Bulls need to regain control above $4,450. From this level, they can push the price to $4,427. Bulls also should control $4,447, which would halt the bearish market. In the event of a downward move due to decreased risk appetite, bu[lls will have to protect $4,382. Breaking through this level, the trading instrument may return to $4,357 and $4,332.