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US stock futures climbed on Wednesday amid increasing expectations that the Federal Reserve will cut interest rates at its next meeting, following the latest inflation data.
Futures attached to the Dow Jones Industrial Average (YM=F) rose 0.3%, the benchmark S&P 500 (ES=F) inched up 0.1, and the tech-heavy Nasdaq 100 (NQ=F) gained 0.2%.
Circle (CRCL) fell in premarket trading after the company announced it would sell 10 million shares on the heels of its first earnings report since its explosive public debut. Cava (CAVA) shares also dove after the company issued its first annual sales growth target cut. CoreWeave (CRWV) is headed for losses at the open despite beating revenue estimates on strong demand for AI.
Stocks roared on Tuesday after the release of the July CPI report, with the S&P 500 and Nasdaq both touching new records. Though the data showed inflation had ticked up, it increased by less than expected. The results boosted bets the Fed would cut interest rates at its September policy meeting, especially in light of recent warnings signs the labor market is weakening.
Later this week, investors will get two more snapshots on the state of the economy with the release of the Producer Price Index on Thursday and retail sales data on Friday.
LIVE 5 updates
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Bitcoin isn’t the reason for crypto’s breakout summer
The crypto world has had room to run this year amid a series of legislative wins and new financial initiatives. But notably, the big news items don’t really involve bitcoin (BTC-USD), Yahoo Finance’s Hamza Shaban notes in today’s Morning Brief.
Hamza writes:
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Japan’s Nikkei hits all-time high
The Nikkei 225, the primary index for the Tokyo Stock Exchange, is trading at all-time highs amid optimism that confusion over the recent US-Japan trade agreement is being addressed in addition to the renewed strength in Big Tech.
Domestically, Japan’s key auto industry is cautiously optimistic that the the positive will outweigh any drag coming from tariffs.
“The Nikkei was not able to hit a record until today because chip-related shares and auto shares dragged on the index,” Takamasa Ikeda, senior portfolio manager at GCI Asset Management, told Reuters.
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China’s $11 trillion stock market stages steady resurgence
Chinese stocks have risen in recent months, helped by strong domestic liquidity and despite a lack of major catalysts.
Bloomberg News reports:
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The best points I have heard this morning on CoreWeave
CoreWeave (CRWV) was teed up to let down investors last night.
And it did on several fronts.
First, the company’s net loss was much higher than consensus.
Second, capital expenditures were a whopping $1 billion higher sequentially. And third, capex may climb another $500 million in the current quarter.
While I appreciate the company’s revenue backlog of $30.1 billion doubled year over year, the company’s mixed results and high debt load are real causes for concern. Hence, the sharp pre-market pullback.
Here are two important call outs this morning from DA Davidson analyst Gil Luria:
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Cava crashing
Cava (CAVA) is getting run over pre-market to the tune of 23%.
Bottom line on this one: When you are valued as a high growth stock and you don’t deliver high growth, your stock will take a beating.
Same restaurant sales only rose 2.1%.
The company slashed its full year same-restaurant sales guidance.
The earnings call wasn’t exactly alarming — the company appears to still be structurally sound.
But a slower economy and increased competition is weighing on the brand’s results. We heard the same exact tone at Chipotle (CMG) and Starbucks (SBUX) this earnings season.
The positive here: Cava is testing salmon for its menu. Who doesn’t like salmon in $15+ salad bowl?!
