US Open: Wall Street erases early gains amid hawkish PMI reading. Nvidia surges 10%

• U.S. indexes gain, driven by Nvidia (NVDA.US) shares but gains slowed somewhat after the open, and the PMI reading put additional pressure on stock market benchmarks
• The U.S. dollar and yields rebound after strong preliminary PMI readings stronger and a higher-than-forecast reading on unemployment claims
• Market shifts expectations of Fed policy easing to December 2024 from November, 'blamed' for very strong services PMIs; chances of September cut drop
• Arista Networks (ANET.US) loses more than 4% after Nvidia comments on Spectrum X debut and business expansion in networking sector. Most semiconductor manufacturers shares, including Taiwan Semiconductor (TSM.US), AMD (AMD.US) and ASML (ASML.NL), are rising today

Among U.S. index futures, today's gains are dominated by the Nasdaq 100 (US100), which rallied 0.43% on the back of a nearly 10% rise in Nvidia stock prices. Other indexes are trading in mixed sentiment; the US500 gains slightly and the US30 loses 0.3%. Initial claims for unemployment benefits in the US turned out to be still low, coming in at 215k versus 220k forecast and 222k previously. The market's focus, however, was on the preliminary S&P PMI data, which came out 'hawkish'. The implied chance of a rate cut in September fell to 57%, down from 65% in the morning.

• S&P Composite PMI: Current: 54.4. forecast 51.1; previously 51.3
• S&P Manufacturing PMI: Current: 50.9. forecast 50.0; previously 50.0
• S&P Services PMI: Current: 54.8. forecast 51.2; previously 51.3

Overall stock market sentiment outside the technology sector and 'large caps' is mostly down today. Source: xStation5

News from companies

• Dell Technologies (DELL.US) gains 8% on AI wave; company added to Evercore ISI tactical outperform list
• DuPont de Nemours (DD.US) shares gain more than 5%; chemical company announced plans to split into three
• publicly traded companies. The decision was met with positive comments from investment funds. Morgan Stanley said it was a “logical choice,” and KeyBanc strongly supported the move.
• Cytokinetics (CYTK.US) shares are losing ground after analysts lowered their target price. The heart drug maker said it will offer $500 million worth of additional shares and is expanding a strategic financing pact with Royalty Pharma.
• GoodRx (GDRX.US) shares gain more than 4% as RBC Capital Markets upgraded the digital health platform to a level with the perform sector, citing significant expansion opportunities for the company.
• Guardant Health (GH.US) shares remain suspended ahead of an FDA advisory panel meeting. The agency intends to discuss the application for premarket approval of the company's Shield blood test for colorectal cancer screening.
• LiveRamp (RAMP.US) are gaining more than 15% after the marketing company announced its fourth quarter results. They definitely beat market expectations.
• Under Armour (UA.US) is losing more than 3% today, as Oppenheimer analysts downgraded the sportswear company. Also, the shares of another apparel manufacturer VF Corp. (VFC.US) (owner of Vans and The North Face) are losing nearly 9% today after a surprisingly heavy loss reported in the fourth quarter. The results brought the company's seventh consecutive quarter of declining sales. Williams Trading downgraded its recommendation on the stock to sell.

VF Corp (VFC.US) shares, D1 interval

Source: xStation5

Arista Networks (ANET.US, D1 interval)

Arista's shares are trading down unexpectedly today, driven by the release of Nvidia's rival Spectrum X system, targeting Ethernet and expansion in the networking business, which the company discussed in part yesterday, following its quarterly report. 

Source: xStation5