Tonight's Highlights: Fed Rate Hike Prospects Dim as Memory Outlier Surges; Nasdaq Nears All-Time High

With risk appetite for technology shares reignited, the Nasdaq Composite is knocking on the door of fresh record highs. Meanwhile, an unexpected contraction in U.S. July retail sales has introduced fresh macro dynamics into Friday’s session.

 

As of writing, Nasdaq 100 futures (SEP6) rose 0.27%, S&P 500 futures edged up 0.08%, and Dow futures slipped 0.16%.

 

The Nasdaq closed Thursday at 26,803.03 points, within striking distance of its previous record close of 27,093.9 and intraday peak of 27,190.21.

 

Having notched a record high on Thursday, the S&P 500 will test the 7,800-point threshold tonight.

 

Memory outperformer SanDisk extended its blistering rally, jumping more than 7% in pre-market trading.

 

The stock surged 13% yesterday after delivering upbeat long-term guidance and pledging to "fully return excess cash to shareholders." Shares have rebounded over 50% from their recent low on July 28.

 

JPMorgan analyst Harlan Sur upgraded SanDisk to "Overweight" from "Neutral" in a Friday note, setting a price target of $2,250—representing a 47% upside from Thursday's close.

 

Macro data added an unexpected twist to the trading day. Advance U.S. retail sales fell 0.6% month-over-month in July to $763.6 billion, missing expectations of a 0.1% gain and marking the sharpest monthly drop since May of last year.

 

Because the metric is not adjusted for inflation, real consumer purchasing power shrank by an even wider margin.

 

Following softer nonfarm payrolls and PPI prints alongside an in-line CPI, prospects of another Federal Reserve rate hike have grown increasingly remote. The dollar weakened following the retail release, while spot gold rebounded from an intraday low of $4,310 to $4,389 per ounce.

 

Economists had cautioned earlier this year that resilient consumer spending was heavily supported by large tax refunds.

 

As that tailwind fades, the U.S. personal savings rate dropped to a four-year low in June. In addition, major shopping events pulled forward into June—including World Cup promotions and Amazon's mid-year sale—are seen as factors dampening July demand.

 

In commodities and geopolitics, Brent crude edged slightly higher after the U.S. threatened an "indefinite" blockade against Iran alongside fresh economic sanctions.

 

Meanwhile, reports of harsh onboard conditions on the USS Abraham Lincoln—stationed in the region to enforce the blockade—including an incident where a sailor attempted to jump overboard, have drawn scrutiny over military morale in the Middle East.

Other News

Apple and Alibaba Reportedly Team Up to Train China-Tailored AI Model

 

Apple has trained a large language model specifically for the Chinese market in partnership with Alibaba Group, according to people familiar with the matter. Alibaba reportedly provided compute and training support for the project.

 

Pokémon Pokopia Global Sales Top 5 Million Units

 

Nintendo and The Pokémon Company announced Thursday that global sales of Pokémon Pokopia, combining physical and digital editions, surpassed 5 million units within four months of its March release.

 

Boosted by the milestone, Nintendo shares rallied nearly 7% in Tokyo on Friday, securing a third consecutive weekly gain—its longest winning streak since last November.

 

Applied Materials Slides Despite Robust Semiconductor Equipment Results

 

Shares of Applied Materials slipped over 5% in pre-market trading despite reporting strong fiscal third-quarter results.

 

Revenue rose 25% year-over-year to $9.12 billion for the quarter ended July 26, while adjusted EPS reached a record $3.50.

 

The company guided fiscal fourth-quarter revenue to approximately $10.25 billion. Although all metrics beat Wall Street estimates, the price action suggests investors were positioned for a wider margin of outperformance.