(Bloomberg) — US equity futures pointed to a strong end to the week on Wall Street, as a premarket surge in Broadcom Inc. powered gains across the entire chip-technology complex.
Most Read from Bloomberg
Contracts on the Nasdaq 100 climbed 0.8%, with shares in Broadcom Inc. jumping almost 20% after it predicted a boom in demand for its artificial intelligence chips. If premarket gains hold, the stock will hit a record high, inching closer to a $1 trillion market cap. Peers Marvell Technology Inc., Micron Technology Inc., Nvidia Corp. and Advanced Micro Devices Inc. also rose.
Stock markets are also likely to benefit from an interest-rate cut next week, with the Federal Reserve more or less priced to deliver a quarter-point reduction. The S&P 500 has rallied 27% this year, and strategists polled by Bloomberg predict it will outpace European peers again in 2025.
“You have a US economy which is doing well and an incoming administration that is very pro-corporate — all that is in the price, but it doesn’t mean the rally can’t extend,” said Timothy Graf, head of EMEA macro strategy at State Street Global Markets.
In currency markets, the pound weakened after Britain’s economy unexpectedly contracted for a second straight month in October. The euro strengthened after the European Central Bank sounded less dovish on rates than some expected after its policy announcement Thursday, forcing traders to pare policy-easing bets for next year.
The dollar was steady against a basket of currencies, but stayed on track for a second straight week of gains.
Graf of State Street expects more gains for the greenback, noting the Fed’s easing cycle could prove shallow relative to Europe, where economic growth is weaker. Swap markets aren’t pricing a cut from the Bank of England at next week’s meeting, despite Friday’s weak data.
China Letdown
Earlier, Asian shares fell as a key economic meeting in China pledged to boost consumption but failed to offer details on fiscal stimulus. A gauge of world stocks is set for the worst week in nearly a month. The disappointment also pushed Europe’s Stoxx 600 index 0.2% lower, while France’s Cac 40 index was 0.2% higher, showing little reaction to the naming of Francois Bayrou as prime minister.
“The newsflow has been underwhelming,” Beata Manthey, head of European equity strategy at Citigroup Inc., said of announcements from China. “The markets want numbers. We didn’t get the numbers.”