US Open: UoM reading and AI drive optimism on Wall Street. US100 gains 0.6%

• Wall Street opens higher, but some of the upside was erased rather quickly
• US30 records 0.3% rally and performs better than US500
• Chip manufacturers continue to 'trump' after the opening. AMD (AMD.US) stands out.
• Financial results and AI fuel euphoria on SuperMicro (SMCI.US) shares, which are trading up 22%
• More dovish comments from Goolsbee's Chicago Fed 
• Optimistic news from US-China meeting 

On the geopolitical side, on the one hand we have a tense situation in the Middle East, but on the other hand optimistic news came from Beijing. U.S. officials have indicated that Yellen is looking forward to visiting China again in due course, according to information provided by the U.S. Treasury Department. Meetings between U.S. and Chinese financial officials are to take place regularly from now on, and China was said to be pushing for deeper mutual financial relations.

BlackRock's analysts expect the first rate cuts in June and estimate 75 to 100 bps cuts in 2024, a forecast that coincided with Fitch Ratings estimates. We are seeing today a continuation of yesterday's rebound in technology stocks, and it seems that comments by Goolsbee of the Fed may have calmed the market somewhat. Goolsbee suggested that a further decline in inflation would make it necessary for U.S. monetary policy to adjust to it, and that rates would fall. The market is now waiting for the University of Michigan data (consumer sentiment, inflation expectations), which will be released at 4:00 pm and could bring higher volatility.

Shares of chipmakers continue to rise. Nvidia (NVDA.US) and AMD (AMD.US) are breaking out the strongest Source: xStation5

Strong UoM data

Univeristy Michigan Sentiments prelim: 78,7 vs 70,1 exp. and 60.9 previously

• Expectations prelim: 75.9 vs 67 exp. and 67.4 previously
• Condition prelim: 83.3 vs 73 exp, and 73.3 previously

UoM 5-yr inflation expectations: 2.8% vs 3% exp. and 2.9% previously

UoM 1-yr inflation expectations: 2.9% vs 3.1% exp and 3.1% previously

Existing home sales: -1% vs 0.26% exp and 0.8% previously

After firstly 'bullish' reaction on UoM data, we can see a higher sellers' activity on US100. Despite that, the reading was very good for US economy momentum, indicating strong consumers and sentiments and what's more important - unexpected fall in inflation expectations in both - long term and short term.

US30 and US100 charts (H1 and M30)

Looking at futures, on the Dow Jones (US30), we see that the index continues the rebound initiated yesterday, although so far the volume of these increases is not significant, which puts a question mark over the potential extent of the rebound. The key resistance level is, of course, the 38,000-point level.

Source: xStation5

After 'profit taking' event of today UoM publications, bulls are re-taking control on US100 after beating 17,200 points again.

Source: xStation5

News from US companies

Growth on the Nasdaq is led by Super Micro Computer (SMCI.US), which gains nearly 22% after the computer hardware and datacenter server rack maker's preliminary financial results beat analysts' expectations.

Source: xStation5

• AT&T (T.US) is gaining after Oppenheimer raised its rating to better, citing trends that include
• improving network capacity and coverage.
• Coherus BioSciences (CHRS.US) shares are up nearly 10% after the company released positive data from the introductory portion of a Phase 2 clinical trial for a liver cancer treatment.
• International Business Machines (IBM.US) gain more than 3% as Evercore ISI upgraded its rating, calling the company an 'undervalued AI beneficiary'
• iRobot (IRBT.US) loses more than 30% after news that the European Union's antitrust authority plans to block Amazon's planned takeover of vacuum cleaner maker Roomba. 
• Spirit Airlines (SAVE.US) rebounds more than 20% as the company indicated it still believes in a merger with JetBlue Airways Corp. despite opposition from U.S. regulators and a court decision blocking the deal.
• State Street (STT.US) gains more than 6% after reporting higher-than-forecast profit for Q4 2023.