© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. REUTERS/Brendan McDermid/File Photo
By Amruta Khandekar and Shristi Achar A
(Reuters) -U.S. stock index futures rose on Monday after a sharp selloff last week, with investors awaiting more clues on interest rates from an upcoming gathering of central bank policymakers at Jackson Hole, as well as quarterly results from Nvidia (NASDAQ:).
Strong gains in equities this year on signs of cooling inflation have come under test in August, with the losing more than 5% from its intra-day high in late July.
Fresh evidence of a robust U.S. economy last week yet again stoked expectations the Federal Reserve could keep rates higher for longer, driving the to its highest level since October.
If the yield on the 10-year note, last at 4.296%, crosses 4.338%, it would hit its highest level since 2007.
Investors are now keenly waiting for comments from Federal Reserve Chair Jerome Powell on Friday at a meeting of central bankers at Jackson Hole in Wyoming that begins on Aug. 24.
“The Jackson Hole symposium will be key to assess Powell’s dovishness meter. If he raises concerns on the economic momentum or the rising credit risks, that may prompt the markets to price in rate cuts to start earlier,” said Charu Chanana, a market strategist at Saxo Markets in a note.
Traders’ bets of a pause in rate hikes in September stood at nearly 89%, according to the CME Group’s (NASDAQ:) Fedwatch tool.
All three main U.S. stock indexes posted declines last week, led by the Nasdaq due to losses in major technology and growth stocks.
On Monday, bruised growth stocks edged higher, with Tesla (NASDAQ:) rising 3.2% in premarket trading to lead the advance.
Nvidia, which sharply outperformed its megacap peers with gains of nearly 6% last week, climbed 2.2% as HSBC raised its price target on the stock to $780, the second highest on Wall Street.
The chip designer is expected to forecast quarterly revenue above estimates when it reports quarterly results on Wednesday.
Nvidia earnings will be a major test for this year’s stock market rally, which has been fueled by optimism around the potential for artificial intelligence.
At 7:06 a.m. ET, were up 112 points, or 0.32%, were up 20.25 points, or 0.46%, and were up 89.75 points, or 0.61%.
Shares of Palo Alto Networks (NASDAQ:) jumped 12.1% in premarket trading as the cybersecurity firm forecast annual billings above expectations. Shares of its peer CrowdStrike Holdings (NASDAQ:) also gained 3.5%.
VMware (NYSE:) gained 4.6% after UK’s competition regulator cleared U.S. tech company Broadcom (NASDAQ:)’s $69 billion purchase of the cloud computing firm.
