Nasdaq On Track To Rebound As QQQ, SPY Futures Rise — Analyst Flags 2 Tailwinds That’s Showing ‘No Signs Of Slowing Down’

• AMD’s Financial Analyst Day commentary could help allay some of the AI skepticism.
• But some widely followed voices on the Street continue to predict a setback.
• Some retail investors see consolidation before the Santa Claus rally kicks in.

U.S. stock futures were firmly in the green early Wednesday after the market closed on a mixed note in the previous session. The spotlight is likely to be on headlines related to the government shutdown and commentary regarding the artificial intelligence (AI) bubble, which has stifled buying interest in tech stocks in recent sessions. 

AMD’s Financial Analyst Day commentary could help allay some of the AI skepticism, even as some widely followed voices on the Street continue to predict a setback.

Carson Group Chief Market Strategist Ryan Detrick flagged higher profits and higher profit margins as dual tailwinds to the current bull market, adding that these two continue to trend higher. “We've discussed about higher profits and higher profit margins for more than two years now as a reason this bull market is alive and well,” he said. “No signs of slowing down.”

How Futures Are Trading

As of 3:30 a.m. ET on Wednesday, the Nasdaq 100,  S&P 500, Dow and Russel 2000 futures rose about 0.56%, 0.33%, 0.15% and 0.13%, respectively.

On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF (SPY), an exchange-traded fund that tracks the S&P 500 Index, remained ‘bullish’ as of early Wednesday. The Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index, continued to attract ‘extremely bullish’ sentiment. The message volume on the SPY ETF stream reduced to ‘normal’ levels and that on the QQQ stream remained ‘high.’

Commenting on the SPY stream, a bullish watcher said the ETF could touch $703 on Wednesday. The ETF ended the session on Tuesday at $683.

A QQQ watcher said, “I anticipate some consolidation here before we launch the Santa rally.”

How Markets Fared Tuesday

The prospect of the 42-day-long government shutdown ending sent stocks soaring on Tuesday, although concerns about the AI bubble and profit-taking generated weakness in the tech sector. The Dow outperformed, with the breadth strongly positive as only four of the 30 index components retreated.

 The QQQ ETF ended the session down 0.27%, while the SPY ETF,  iShares Russell 2000 ETF (IWM) ETF and SPDR Dow Jones Industrial Average ETF Trust (DIA) ETFs, climbed 0.23%, 0.09% and 1.18%, respectively.

Key Catalysts To Watch Out For

A slew of Federal Reserve speakers are lined up for the day, including:

-San Francisco Fed’s Mary Daly ( 8 a.m. ET)

- New York Fed’s John Williams (9:20 a.m. ET)

-Minneapolis Fed’s Neel Kashkari (10:25 a.m. ET)

-St. Louis Fed’s Alberto Musalem (12:15 p.m. ET)

- Cleveland Fed’s Beth Hammack (12:20 p.m. ET)

-Atlanta Fed’s Raphael Bostic (3:20 p.m. ET)

The Treasury is due to release its monthly federal budget at 2 p.m. ET.

The most noteworthy earnings scheduled for the day are Circle Internet Group (CRCL), GlobalFoundries (GFS), Tencent Music (TME), Cisco (CSCO), Firefly Aerospace (FLY), and Flutter Entertainment (FLUT)

How Other Markets Fared

Crude oil futures reversed course early Wednesday after the previous session’s gain, and gold futures edged up. The 10-year U.S. Treasury note yield pulled back below the 4.1% mark, and the U.S. dollar was slightly firmer against its counterparts. Most major Asian markets moved in tandem with Wall Street’s rise overnight, although the Australian, Malaysian, and Chinese markets fell marginally to modestly.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: ‘It Will Work Out:’ Did Michael Burry Just Say He’s Not Wrong About His Big AI Short?

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