Nasdaq leads early gains despite mixed big tech moves as rotation continues

10am: Nasdaq leads despite mixed start for big tech

The Nasdaq led the way in the first half hour of trading on Wednesday, up 0.9% despite Apple, Meta, Alphabet, Meta, Broadcom and Tesla opening in the red. 

The S&P 500 opened up 0.5% and the Dow Jones 0.3%.

Top risers on the Dow were Goldman Sachs, Nvidia, Disney and Amazon.  

8am: Nasdaq set to lead Wall Street higher

Wall Street stock futures were pointing higher on Wednesday morning with the tech-led Nasdaq expected to lead gains as the sector rotation continues to hold back large-scale index moves.

Nasdaq 100 futures were up 0.45%, while those for the S&P 500 were pointing 0.3% higher and Dow Jones futures indicated a 0.1% gain. 

The previous session saw stocks overcome a rocky start to close only slightly above flat, with the three major indices all finishing up around 0.1%. 

Ahead of the opening bell in New York, the European session was sizzling, with strong gains in London and Madrid.

Stateside, Nvidia shares were up 2% in premarket trading, on the back of its ‘full-stack’ supply contract with Meta, with Amazon and Palantir also pointing to gains of at least 1%, with Apple, Microsoft and Meta’s own flatter.

The dollar was on the front foot earlier before gains were trimmed as its recent slow recovery plods onward. Treasuries edged higher, pushing the 10-year yield to 4.06%. Oil rebounded to about $63 amid Middle East tensions, while gold holds near $4,913 within its recent trading range.

Digging below the headline moves from the majors, tells “a very different story”, said market analyst Kenny Polcari at Slatestone Wealth.

Only three sectors finished higher, he notes: financials and real estate both closed up 1%, while industrials ended +0.5%.

The other eight sectors closed lower, with consumer staples hit the hardest, down 1.5%, though this follows a surge of nearly 15% over the past eight weeks.

Likewise, energy fell 1.1% after rallying more than 21% over that same stretch, and basic materials dropped 1.1% after an 18% run in eight weeks.

“So, what does this tell you? This isn’t panic. It’s short-term rotation,” said Polcari. “Traders are harvesting short-term gains in areas that have outperformed – using those profits to offset broader weakness elsewhere.

“They’re creating short-term alpha in a market that feels unstable. And in volatile environments, that’s exactly what active money tends to do.

“Longer term money tends to ride out the storm, comfortable in their portfolio, comfortable in the names they own and comfortable in their diversification.

“It doesn’t mean one is right and the other is wrong – it just means one is trading volatility while the other is investing thru the storm – understanding who you are is what matters.”

US tech has taken a knock, with the a major tech sector index now 10% below its highs and big names sharply off recent peaks – Amazon down 24%, Nvidia 14%, Meta 20% and Palantir 40%.

Today’s US data includes durable goods, housing numbers and the latest Federal Reserve minutes, alongside earnings from chipmaker ADI and payments group GPN.