Tech Stocks May Lead Early Rally On Wall Street As Intel Soars

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Thursday, with stocks likely to move to the upside after ending yesterday's volatile session mixed.

Technology stocks may help lead an early rally on Wall Street, as reflected by the 1.1 percent surge by the tech-heavy Nasdaq 100 futures.

The upward momentum for tech stocks comes as shares of Intel (INTC) are soaring by 30.2 percent in pre-market trading after the chipmaker announced a collaboration with Nvidia (NVDA) to jointly develop multiple generations of custom data center and PC products.

Nvidia, which is jumping by 2.7 percent in pre-market trading after moving to the downside over the past few sessions, will invest $5 billion in Intel's common stock at a purchase price of $23.28 per share.

The futures remained firmly positive following the release of a Labor Department report showing initial jobless claims pulled back by more than expected in the week ended September 13th.

The Labor Department said initial jobless claims fell to 231,000, a decrease of 33,000 from the previous week's revised level of 264,000.

Economists had expected jobless claims to pull back to 240,000 from the 263,000 originally reported for the previous week.

Stocks turned in a lackluster performance throughout much of the session on Wednesday before seeing substantial volatility in afternoon trading following the Federal Reserve's highly anticipated monetary policy announcement.

The major averages showed wild swings back and forth across the unchanged line before eventually closing mixed. While the Dow climbed 260.42 points or 0.6 percent to 46,018.32, the S&P 500 edged down 6.41 points or 0.1 percent to 6,600.35 and the Nasdaq fell 72.63 points or 0.3 percent to 22,261.33.

The late-day volatility on Wall Street came following the Federal Reserve's widely expected announcement of its decision to lower interest rates by a quarter point.

The Fed said it decided to lower the target range for the federal funds rate by 25 basis points to 4.0 percent to 4.25 percent, citing a shift in the balance of risks.

The latest projections from Fed officials also suggest they expect the central bank to lower rates two more times this year, with rates forecast in a range of 3.50 percent to 3.75 percent by the end of 2025.

Traders may have been disappointed that Fed officials don't appear eager to cut interest aggressively, with only newly sworn in Fed Governor Stephen Miran preferring to lower rates by half a point at the latest meeting.

"The strong vote for the 25-basis-point cut suggests that members, while acknowledging that downside risks to the job market have increased, are not panicking about the state of the economy," said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni.

The latest forecasts also suggest Fed officials currently only expect one rate cut next year, although there were significant differences of opinion on the outlook.

The central bank's next monetary policy meeting is scheduled for October 28-29, with CME Group's FedWatch tool currently indicating an 87.7 percent chance the Fed will lower rates by another quarter point.

Reflecting the lackluster close by the broader markets, most of the major sectors ended the day showing only modest moves.

Banking stocks showed a strong move to the upside, however, with the KBW Bank Index climbing by 1.3 percent to a record closing high.

On the other hand, oil service stocks moved lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 1.1 percent.

Commodity, Currency Markets

Crude oil futures are rising $0.34 to $64.39 a barrel after falling $0.47 to $64.05 a barrel on Wednesday. Meanwhile, after slipping $7.30 to $3,717.80 an ounce in the previous session, gold futures are sliding $15.50 to $3,702.30 an ounce.

On the currency front, the U.S. dollar is trading at 147.54 yen versus the 146.99 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1806 compared to yesterday's $1.1813.

Asia

Asian stocks turned in another mixed performance on Thursday following a slightly hawkish-leaning policy decision from the Federal Reserve.

Investors reacted to hawkish comments from Fed Chair Powell, who said higher goods prices are feeding through to inflation and that the FOMC expects inflation to continue to build into next year.

Chinese shares fell sharply, with trade tensions in focus after China's internet regulator banned domestic tech companies from purchasing Nvidia's RTX Pro 6000D chips.

Separate reports revealed that China has decided to end an antitrust investigation into the dominance of Google's Android in the world's largest smartphone arena.

The benchmark Shanghai Composite Index slumped 1.2 percent to 3,831.66 ahead of a phone call between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for Friday.

Hong Kong's Hang Seng iIndex tumbled 1.4 percent to 26,544.85 after China's central bank left its key interest rate unchanged.

Japanese markets rallied on optimism about the economy. The Nikkei 225 Index jumped 1.2 percent to 45,303.43, ending above the 45,000 line for the first time. The rally was led by heavyweight technology and semiconductor-related shares on hopes for robust artificial intelligence demand.

The broader Topix Index settled 0.4 percent higher at 3,158.87 and the yen pulled back from a two-month high after veteran lawmaker and fiscal dove Sanae Takaichi said she will run in the ruling Liberal Democratic Party's leadership election.

Seoul stocks set a new record high despite a mixed close on Wall Street overnight. The Kospi surged 1.4 percent to 3,461.30, with auto and technology stocks pacing the gainers.

Market bellwether Samsung Electronics shot up 2.9 percent to 80,500 won, breaching the 80,000-won threshold for the first time in 13 months on expectations of improved earnings amid rising memory chip prices. Its chipmaking rival SK Hynix soared 5.9 percent.

Australian markets hit a two-week low after the release of lackluster August employment data. The benchmark S&P/ASX 200 Index closed 0.8 percent lower at 8,745.20, dragged down by mining and energy stocks. The broader All Ordinaries Index dropped 0.7 percent to 9,030.90.

Oil & gas producer Santos tumbled 11.9 percent after a consortium led by Abu Dhabi National Oil Company withdrew its $18.7 billion offer to buy the company. Woodside Energy Group shares slumped 6.3 percent.

New Zealand stocks ended sharply lower and the kiwi dollar skidded after data showed GDP shrank more than expected in the second quarter. The benchmark S&P/NZX-50 Index slid 0.8 percent to 13,120.03, deepening losses from the previous session.

Europe

European stocks have moved notably higher on Thursday after the U.S. Federal Reserve cut interest rates for the first time since December and indicated more cuts would follow amid mounting signs of labor market weakness.

In a widely expected move, the Bank of England decided to hold its key interest rate and to reduce the stock of government bond purchases by 70 billion pounds over the coming twelve months.

The Monetary Policy Committee, governed by Andrew Bailey, voted 7-2 to leave the bank rate unchanged at 4.00 percent.

While the German DAX Index and the French CAC 40 Index are both up by 1.1 percent, the U.K.'s FTSE 100 Index is posting a more modest gain, up by 0.2 percent.

Bytes Technology Group, which operates in IT solutions and services, has rallied after delivering a resilient performance in the first half.

Engineering giant Renishaw has also moved sharply higher after it delivered record full-year revenue and stronger adjusted profit.

On the other hand, retailer Next Plc has plummeted after warning that sales will slow in the second half.

U.S. Economic News

After reporting first-time claims for U.S. unemployment benefits climbed to a nearly four-year high in the previous week, the Labor Department released a report on Thursday showing initial jobless claims pulled back by more than expected in the week ended September 13th.

The Labor Department said initial jobless claims fell to 231,000, a decrease of 33,000 from the previous week's revised level of 264,000.

Economists had expected jobless claims to pull back to 240,000 from the 263,000 originally reported for the previous week.

The report also said the less volatile four-week moving average edged down to 240,000, a decrease of 750 from the previous week's revised average of 240,750.

A separate report released by the Federal Reserve Bank of Philadelphia on Thursday said regional manufacturing activity expanded overall in the month of September.

The Philly Fed said its diffusion index for current general activity surged to a positive 23.2 in September from a negative 0.3 in August, with a positive reading indicating growth. Economists had expected the index to rise to a positive 2.3.

Looking ahead, the Philly Fed said the survey's future indicators suggest widespread expectations for growth over the next six months, with the diffusion index for future general activity climbing to 31.5 in September from 25.0 in August.

At 10 am ET, the Conference Board is due to release its report on leading economic indicators in the month of August. The leading economic index is expected to edge down by 0.1 percent in August, matching the dip seen in July.

The Treasury Department is scheduled to announce the details of this month's auctions of two-year, five-year and seven-year notes at 11 am ET.