Nasdaq 100 Jumps as NVDA Soars Ahead of July FOMC Meeting

Also, 30-year T-bond, copper, crude oil and Japanese yen futures

1. Nasdaq 100 E-mini futures (/NQ): +2.3% 

2. 30-year T-bond futures (/ZB): +0.55% 

3. Copper futures (/HG): +1.95% 

4. Crude oil futures (/CL): +3.08% 

5. Japanese yen futures (/6J): +2.07% 

Microsoft (MSFT) earnings may have disappointed, but a timely announcement about building more data centers on the back of strong earnings from Advanced Micro Devices (AMD) after hours yesterday has breathed new life into the tech sector today. The Treasury’s quarterly refunding announcement (QRA) came and went without bothering bonds, which seem more focused on the Federal Reserve interest rate decision this afternoon (and rising geopolitical fears). Speaking of which, commodity prices are up across the board following the Israeli assassination of Hamas leader Ismail Haniyeh in Iran. 

Nvidia (NVDA) is coming to the rescue for the equity market, as the chipmaker soars over 7% in pre-market trading after Microsoft said it would increase capital spending on artificial intelligence data centers. Nasdaq futures (/NQU4) rose over 2% ahead of the New York open. Boeing (BA) reported a wider-than-expected loss, but the share price rose before the bell when the company announced that it would appoint a new CEO to lead the it through troubled times. Meta Platforms (META) will report earnings after the bell today.  

30-year T-bond futures (/ZBU4) rose 0.55% this morning and pierced the June range that has contained price action to the upside up until now. /ZBU4 is trading at the highest level since March. Active investors are preparing for the Federal Reserve’s interest rate announcement today. Markets see little chance of a cut, but traders do expect Fed Chair Jerome Powell to clear the way for a rate cut in September. 

Copper futures (/HGU4) surged over 2% this morning after prices fell to the lowest since March in yesterday’s session. A strong pullback in the dollar and Treasury yields are helping to lift the metal. Meanwhile, traders are hopeful China will step up some stimulus measures over the coming months. That, combined with a relatively low copper price, could encourage smelters in the country to increase production.  

Crude oil (/CLU4) rose over 3% as tensions in the Middle East come back into the spotlight. Hamas leader Ismail Haniyeh was killed in Iran, although no one has claimed responsibility for the assassination. Earlier this week, Israel eliminated one of Hezbollah’s most senior commanders in an airstrike. The risks of a broader conflict from Iran retaliating are baking in some risk premium into crude prices after the commodity fell to levels not traded at since early June. The Energy Information Administration’s weekly crude oil inventory report is in focus for traders today.  

Japanese yen futures (/6JU4) surged after the Bank of Japan (BOJ) raised its benchmark interest rate overnight, causing Japanese yields to rise and pushing short speculators out of the market. The move shows Japanese policymakers are ready to change their thinking on monetary policy following a period of ultra-loose policy settings. That shift in thinking could offer the currency enough energy to carry the recent gains forward, although we’ll likely see some short-term pullbacks.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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