US Stock Market Preview: Mixed Futures Ahead of September Retail Data Release

US Economic Data and Market Reactions

On Wednesday, the US released its retail sales data for September, reporting a total of $733.26 billion, slightly up from the previous $732.01 billion. Core retail sales also increased to $593.91 billion from $592.26 billion. Additionally, the core PPI year-on-year rate was 2.6%, below the expected 2.7%, while the month-on-month rate was 0.1%, against an expectation of 0.2%.

After the data release, spot gold prices rose by $7 to $4,147.21 per ounce. US stock index futures showed mixed results: Dow futures were up 0.1%, while Nasdaq futures fell by 0.1%, and S&P 500 futures increased by 0.05%.

Stock Movements

Star tech stocks showed varied performance, with Google (GOOGL) and Google (GOOG) rising over 4%, and Broadcom (AVGO) nearly 4%. In contrast, AMD fell over 6%, and Nvidia (NVDA) dropped more than 4%.

Popular Chinese stocks mostly rose in pre-market trading, with Pony.ai (PONY) up nearly 11% and Alibaba (BABA) increasing over 2%.

Notable pre-market gains included Symbotic (SYM), which surged over 21% after reporting Q4 revenue of $618 million, exceeding estimates. Zoom (ZM) rose over 5% with Q3 revenue of $1.2298 billion, a 4.4% year-on-year increase. Best Buy (BBY) also saw a rise of over 3% after reporting Q3 revenue of $9.672 billion, above expectations.

Alibaba and Pony.ai Earnings

Alibaba reported a Q3 revenue increase of 4.8% year-on-year to 247.8 billion yuan, slightly above market expectations. Its cloud business revenue surged by 34%, while instant retail grew by 60%. However, adjusted net profit fell by 72% due to investments in instant retail and technology.

Pony.ai's pre-market surge of over 11% followed its Q3 report, showing a 72% revenue increase to 181 million yuan, with its Robotaxi business revenue up 89.5%.

Google Challenges Nvidia

Google (GOOGL) is leveraging its advancements in AI to challenge Nvidia's dominance in the chip market. The company is promoting its TPU chips to major clients like Meta Platforms (META), potentially capturing a significant share of Nvidia's revenue.

Analysts have noted Broadcom (AVGO) as a derivative investment opportunity due to its close ties with Google, which uses Broadcom's ASICs for its TPU chips.

Market Outlook and Federal Reserve Expectations

Market expectations for a Federal Reserve rate cut in December have surged to 80% following supportive comments from Fed officials. Analysts suggest that a "dovish pause" may be more prudent given internal divisions within the Fed regarding monetary policy.

Conclusion

The US economic data release has led to mixed reactions in the stock market, with significant movements in tech stocks and Chinese companies. The ongoing developments in AI and chip technology continue to shape market dynamics, while expectations for Federal Reserve actions remain high.