Wall Street futures rise ahead of inflation data; chip stocks rally

  • Ford slows EV ramp as Q2 commercial vehicle profit booms
  • Exxon Mobil, Chevron slide after lower qtrly profit
  • Chip stocks climb after Intel’s surprise quarterly profit
  • Futures up: Dow 0.18%, S&P 0.39%, Nasdaq 0.80%

July 28 (Reuters) – U.S. stock index futures rose on Friday and put Wall Street on track for a higher close for the week, which was dominated by the Federal Reserve’s signals on a possible end to rate hikes and mixed earnings reports from marquee tech companies.

Chip stocks surged in premarket trading after Intel (INTC.O) posted a surprise quarterly profit, while global stock markets eased following Japan’s tweaks to its monetary policy. Investors are also looking ahead to key U.S. inflation figures later in the day.

The Dow snapped its longest winning streak since 1987 in the previous session as U.S. Treasury yields pressured stocks lower after news that the Bank of Japan will allow long-term interest rates to rise.

On Friday, the Bank of Japan made its yield curve control policy more flexible and loosened its defense of a long-term interest rate cap, in moves seen by investors as a prelude to an eventual shift away from massive monetary stimulus.

“The biggest impact you would expect to see would be in the bond markets obviously, and this would be selling of U.S. Treasuries as Japanese investors moved to repatriate funds back home instead,” said Stuart Cole, chief macro economist at Equiti Capital.

“This effectively means we could see upwards pressure on yields globally, and that is not great news for stocks.”

The yield on the U.S. 10-year note slipped but still hovered close to its 4% level hit in the previous session.

Chipmaker Intel’s (INTC.O) results and forecast pointed to an improving PC market, sending its shares up 7.1% in premarket trading.

Peers Nvidia (NVDA.O), Micron Technology (MU.O) and Marvell Technology (MRVL.O) gained over 1% each.

On the economic front, the Fed’s preferred inflation gauge – personal consumption expenditures (PCE) price index – figures for June are due later in the day. In the 12 months through June, the core PCE price index likely rose 4.2%, according to economists polled by Reuters.

All three major U.S. indexes are on track to end the week marginally higher, supported by Big Tech earnings, hopes that the Fed’s monetary policy tightening was ending and the world’s largest economy was heading for a soft landing.

At 6:58 a.m. ET, Dow e-minis were up 65 points, or 0.18%, S&P 500 e-minis were up 17.75 points, or 0.39%, and Nasdaq 100 e-minis were up 124 points, or 0.8%.

Ford Motor (F.N) slid 1.0% after Chief Executive Jim Farley outlined a change in the automaker’s product strategy, slowing the ramp-up of money-losing EVs, shifting investment to its commercial vehicle unit and citing plans to quadruple sales of gas electric hybrids over the next five years.

Exxon Mobil (XOM.N) fell 0.9% after the oil giant posted a 56% slump in quarterly profit, while peer Chevron (CVX.N) shed 2.4% after saying that its annual production forecast was near the low-end of its previously estimated range.

First Solar (FSLR.O) jumped 10.8% after its second-quarter earnings beat estimates and the company announced plans to spend up to $1.1 billion on its fifth U.S. factory.

Enphase Energy (ENPH.O) fell 15.8% after the solar inverter maker’s third-quarter revenue forecast missed expectations, while Procter & Gamble climbed 1.6% (PG.N) after the consumer behemoth beat analysts’ estimates for quarterly sales.

Reporting by Bansari Mayur Kamdar and Johann M Cherian in Bengaluru; Editing by Maju Samuel

Our Standards: The Thomson Reuters Trust Principles.

Bansari reports on the global financial markets and writes Reuters’ daily flagship market reports on equities, bonds and currencies. An economist by training and winner of the Arthur MacEwan Award for Excellence in Political Economy, she has written for renowned global papers and magazines including The Diplomat, Boston Globe, Conversation, Huffington Post and more.

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