US stock futures rose on Wednesday as Nvidia and other chip stocks crept higher, investors shifted their bets on a Fed rate hike next month, and cryptocurrencies fell.
Futures on the Dow Jones Industrial Average (YM=F) rose 0.1%, while those on the S&P 500 (ES=F) climbed 0.8%. Contracts for the Nasdaq-100 (NQ=F) added 1.9%.
The bond market sold off on Tuesday, with the 10-year Treasury yield (^TNX) briefly spiking above 5% again, as traders recalibrated their bets for higher interest rates following hotter-than-expected CPI inflation data. Comments from Fed officials also fueled the bond rout, with Federal Reserve governor Michelle Bowman saying, “There is still work to do to bring inflation closer to 2%.”
As Anthropic’s (ANTH.PVT) hotly anticipated IPO draws nearer, the AI trade remains front and center, particularly after the midterm elections have brought the country to a crossroads on the data center build-out.
Nvidia (NVDA) stock, once the darling of the AI trade, is rebounding in premarket trading after suffering two straight days of substantial losses amid its spy plot fiasco involving CEO Jensen Huang.
Shares of CoreWeave (CRWV), an Nvidia-backed cloud provider, popped 17% in premarket trading after the company reported a better-than-expected revenue outlook on the back of strong AI compute demand.
It’s a quiet day on the earnings and economic data front, with an update on mortgage rates coming later in the day.
LIVE 3 updates
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What 400 years of hot IPOs say about buying Anthropic on day one: Chart of the Day
Anthropic’s roadshow is selling the future of AI. Four centuries of hot IPOs say the first trade is rarely the best one.
The AI lab is asking for as much as $1.4 trillion at the top of its $70-to-$78 range, counting every possible share. Trading could start as soon as next week. Rival OpenAI (OPAI.PRV) may not be far behind: OpenAI president Greg Brockman said last week the company could be ready to go public next year.
History has a warning for anyone planning to buy on the first day. The world’s first IPO, the Dutch East India Company, began trading in 1602. Its stock took about three decades to double.
This year brought two fresh reminders. SpaceX (SPCX) opened at $150 in June, $15 above its IPO price, and soared about 40% in its first week. By August, it was in a nearly 30% hole. Five months later, SpaceX is still below its first trade.
Cerebras (CBRS) had it worse. The AI chipmaker opened at nearly double its $185 IPO price in May. Its first close is still its best, and the stock now trades at about half what IPO buyers paid.
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Why this top Wall Street strategist isn’t bullish on the S&P 500 for 2027
Yahoo Finance’s Brian Sozzi reports:
The S&P 500 (^GSPC) could be a tough one to rally around in 2027.
“We’re not particularly bullish on the index,” Bank of America head of US equity and quantitative strategy Savita Subramanian said on Sozzi Unleashed. “I think the index itself is a bit risky because the other thing that I worry about is we’ve been in a 30-, 40-year period where we’ve seen S&P index inflows every year. We’ve never been in a market environment where the index has seen outflows. So I worry about that to some extent, because we’re now at a point where investors are fairly saturated in equities across the board. You look at individuals, you look at asset owners and what’s the most crowded equity ticker in the world … it’s the S&P 500 index.”
The S&P 500 is up 9.5% year to date, outperforming the Dow Jones Industrial Average’s (^DJI) 8.5% advance and the 7.5% rise for the Nasdaq Composite (^IXIC).
Subramanian warned, “So if you need to raise capital to meet your yield obligations or whatnot, I think that that’s where things get a little bit interesting in terms of outflows. And that’s where we see some risks to this thesis that the S&P 500 is just going to go up forever.”
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Good morning. Here’s what’s happening today.
