The Nasdaq futures are trading 400 points higher at the start of trade, while the S&P 500 futures are up 40 points. The Dow futures, which had opened lower, have also recouped their initial losses and are trading above the flat line.
It was a strong truncated week for Wall Street indices before markets were shut on Friday, with the Dow Jones climbing nearly 2% for the week and closing just under the 53,000 mark, a level never seen by the index before. The S&P 500 and the Nasdaq Composite also gained 1.8% and 2.1% respectively for the week.
Gains for the S&P 500 and Nasdaq came despite many of the chipmakers, shares of which have risen between 150% to as high as 400% this year already, sold-off across Wednesday and Thursday. The VanEck Semiconductor ETF fell 3.2% last week, its second straight weekly loss.
Mark Newton of Fundstrat wrote that financials, healthcare and industrial stocks closed at record levels last week, more than offsetting the underperformance of chipmakers. He now sees the S&P 500 at 8,000 by mid-August, that is a 7% jump in just over a month.
Ed Yardeni of Yardeni Research believes that Wall Street is now starting to suffer from “AI Fatigue” as they are not convinced that the huge investments made so far will fetch a good rate of return.
“Nevertheless, we don’t buy the bubble stories that compare the current bull market in stocks to the tech bubble of the late 1990s, which was followed by the Great Tech Wreck (GTW) of the early 2000s,” he told CNBC.
While this week is a full trading week, there will be minimal cues before earnings begin for the quarter along with inflation data that will be reported next week onwards.
However, the two major events to watch this week will be the minutes of the June Fed meeting, the first under Kevin Warsh, and the listing of South Korean chip giant SK Hynix, who seeks to raise $29 billion in a record foreign IPO on Wall Street. The listing takes place this Friday.
