US OPEN: Oil reverses declines despite Trump's assurances, while Wall Street awaits Nvidia's judgment report

It is clear that Wall Street investors are unsure of what to expect in the near future. Volatility in recent days has decreased significantly, and a sideways trend has appeared on the chart. Investors are waiting today for the results of the American chip giant, Nvidia, while the broader market sentiment will depend not so much on the data as on Kevin Warsh's words during his speech in Jackson Hole this Friday. Nevertheless, the PCE inflation data in the US published before the opening turned out not to significantly change the picture of the American economy, and the earlier sell-off in the crude oil market brought investors another moment of respite, although at the same time investors completely ignored positive words from Trump, which later led to a significant rebound in prices. 

Market situation: Macro, oil and indices 

The publication of the July report on Americans' income and spending brought mixed conclusions. The headline PCE inflation rate was 0.2% m/m (and slightly more than expectations on an annual basis at 3.7% y/y). In turn, core PCE inflation was 0.3% m/m and 3.3% y/y (in line with expectations). Real consumer spending turned out to be flat (0.0% m/m), signaling a cooling of demand after June driven by promotional campaigns such as Amazon Prime Day.

A sell-off was visible in the commodities market during the first part of the day. WTI oil and Brent oil lost up to 1%, but we are currently observing a clear demand reaction. Nevertheless, the earlier declines were triggered by information about Iran and Oman taking up talks regarding a "temporary framework" for unblocking ship traffic in the Strait of Hormuz. The geopolitical situation is being heated up by statements from President Donald Trump, who suggested that Iran's supreme leader was seriously injured, but at the same time indicates that as many as 10 million barrels of oil flowed through the Strait of Hormuz yesterday. 

What is the situation on futures contracts? 

• The contract for the technical Nasdaq 100 index (US100) lost as much as 0.3% before the start of the session, but despite the negative cash opening, we are currently observing a flat move at 0.01%. Tech markets are holding their breath ahead of Nvidia's report and Salesforce results.
• US500 on the S&P 500 index is also flat but after initial declines it us up by 0,11%, oscillating around 7700 points. Barclays strategists warn of rising macro volatility and seasonal weakness ahead of the midterms. 
• The contract for the small-cap Russell 2000 index is doing the best and gained as much as 0.1% during the first minutes

Volatility on key stocks starts rather flat, except for clearly losing Alphabet or gaining AMD. The industrial and hardware sectors, represented by Apple, Dell, and Cisco, are doing relatively well. Source: XTB

US100 Technical Analysis

US100 contract quotes were still trying to break out of the triangle formation in the first half of August, attacking levels of 30,500 points. Later, however, a correction occurred and the range of the triangle formation was realized after a downward breakout. However, US100 is holding support around 29,000 points, which is strengthened by the 23.6 retracement. If today's session ends with an increase, it could mean an attempt to break out of the current short-term downward trend. 

4. Company news (Yahoo Finance / Premarket)

• Nvidia (NVDA.US) (-0.3%): The market is pricing in an implied move of about 5.4% after the results are published. Although the P/E valuation is near local lows, analysts point to rising credit risk (CDS) for Nvidia relative to other large tech companies and a surge in HBM4 memory costs.
• Abercrombie & Fitch (ANF.US) (+30%): Shares are rising after reporting a $100 million return on duties and after raising the full-year sales growth forecast and beating expectations in Q2 results.
• Intuit (INTU.US) (-3.4%): The financial software company is losing heavily after presenting disappointing full-year profit and revenue forecasts, which adds to concerns about AI pressure on traditional IT.
• Zoom Communications (ZM.US) (-6.12%): Share sell-off following the presentation of cautious revenue forecasts for the current quarter, which overshadowed progress in the commercialization of AI solutions.
• Boston Scientific (BSX.US) (-4.3%): The stock price is falling in response to an announcement about a global cybersecurity incident that disrupted the company's IT systems.
• JM Smucker (SJM.US) (+4.2%): The food producer raised its full-year adjusted earnings per share forecast thanks to high margins in the coffee and snacks segment.
• Summit Therapeutics (SMMT.US) (+11.7%): A sharp increase in quotes after successful results of phase III clinical trials for a drug for biliary tract cancer (ivonescimab).

After the last great quarter and revenues of $81.6 billion, the latest data are expected to show revenues of $92 billion. However, given the expectation of a significant beat of expectations of at least 5%, anything below $97 billion may be considered a failure by investors. That is why the appearance of a three-digit number in revenues would be a certain milestone for the company. Source: XTB