Stock futures are sharply higher after the Federal Reserve delivered its first interest rate cut of the year; Intel (INTC) shares are soaring on news that AI investor favorite Nvidia (NVDA) will invest $5 billion in the beleaguered chipmaker; Meta Platforms (META) revealed its AI-powered glasses; and StubHub (STUB) stock is pointing lower after shares in the ticket reseller fell in their first trading session. Here's what investors need to know today.
1. Stock Futures Point to Record Highs for Major Indexes
Stock futures are soaring as investors digest the Federal Reserve's decision yesterday to cut its benchmark rate and the economic projections of Fed officials. Futures tied to the tech-heavy Nasdaq were up more than 1% this morning, while those linked to the S&P 500 and Dow Jones Industrial Average were also solidly higher. The major indexes are on track to open at all-time highs, after turning in a mixed performance yesterday. The yield on the 10-year Treasury, which affects borrowing costs on all sorts of loans, was down slightly at 4.06%. Bitcoin is at $117,200, trading at its highest levels in a month, while gold futures fell slightly to $3,700 an ounce.
2. Federal Reserve Cuts Interest Rates, But Outlook Unclear for Additional Cuts
The Federal Reserve on Wednesday delivered the quarter percentage point interest rate cut that investors expected, but Chair Jerome Powell couldn’t guarantee that more were on the way. Fed officials on average expect two more rate cuts in the Fed's remaining two meetings of the year, but Powell said those projections were dependent on upcoming economic data releases. Meanwhile, the Fed’s economic outlook projected moderate growth, stable unemployment, and slowing inflation, with officials split on how aggressively to cut interest rates at upcoming meetings.
3. Intel Stock Soars as Nvidia Announces $5 Billion Investment
Nvidia (NVDA) will invest $5 billion in embattled rival Intel (INTC) as the two tech firms agreed to jointly develop chips for personal computers and data centers. As part of the agreement, Intel will build custom processing units that Nvidia will integrate into its AI infrastructure, while it will also integrate Nvidia chips into its personal computers. “This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms,” said Nvidia CEO Jensen Huang. The move comes after the federal government took a 10% stake in Intel. Shares of Intel were up about 30% in recent premarket trading, while Nvidia shares added 3%.
4. Meta Showcases New AI-Powered Glasses
Meta Platforms (META) on Wednesday unveiled new AI-powered glasses as part of its developer conference. CEO Mark Zuckerberg demonstrated the Meta Ray-Ban Display glasses, which the company said “takes microphones, speakers, cameras, and a full-color display backed with compute and AI — and puts it all together in a single device that’s stylish and comfortable.” The device also comes with the Meta Neural Band wrist monitor that tracks movements to help control the glasses. The glasses will be priced at $799, the company said. Meta shares were little change in premarket trading.
5. StubHub Falls in First Trading Session
Ticket reseller StubHub (STUB) shares fell in their first session of trading yesterday after its initial public offering. StubHub priced shares at $23.50, and the stock climbed to above $26 during the session before closing at $22. StubHub sold 34 million shares and raised $800 million in the IPO. The money will go toward paying down debt, CEO Eric Baker said on CNBC. StubHub shares were down 2% ahead of the bell on Thursday.
