US equity futures continue to gradually crawl higher week after week as traders stay hopeful and optimistic, despite the frothiness around tech stocks and their lush AI promises, showcasing that investors place much more emphasis on the impending rate reductions from the Federal Reserve and the arrival of looser policy conditions.
Money markets are currently assigning approximately 90% probability in the scenario that the Fed will reduce rates in September by 25bps, after Chair Powell’s dovish speech at Jackson Hole late last week, but also from the pro-rate-cut manoeuvres from President Trump and his politicization influence on the institution.
Yesterday NVIDIA toppled analyst expectations, beating both of its revenue and EPS targets, yet the sales outlook unnerved investors. The semiconductor giant revealed that it had no sales of its H20 chips to China during the quarter and according to its forward guidance, is expecting no potential shipments towards the Red Giant in the coming quarters. The announcement drove its share price lower by almost 6% in the aftermarket hours but since then it recuperated most of the losses as investors remained bullish on the AI rally and branded it as intact, treating the event as a dip buy opportunity.
Now investors will monitor closely the preliminary GDP results for the second quarter of 2025 that land later on today in the American session, for an health update of the US economy and tomorrow Friday, eyes will fixate upon the Fed’s favourite inflation metric, the Core PCE index, which will shed light onto how price pressures evolved within the US in the month of July.
Technical Analysis
S&P500 Chart – Equities on the brink of tapping another record high as rate cut bets aggravate
Resistance: 6500 (R1), 6600 (R2), 6700 (R3)
Support: 6350 (S1), 6230 (S2), 6150 (S3)