Ringside · Pre-Bell · September 3
- Anthropic will run 5 gigawatts of Google's newest inference silicon during 2027.
- Snowflake trades 24.1% higher at $380.00 before the open after lifting its outlook.
- Jobless claims at 8:30 a.m. Eastern, ISM services at 10:00, August payrolls tomorrow.
Indexes
Three companies that build the physical layer of artificial intelligence reported after Wednesday's close, all three beat, and all three are lower before the open. Broadcom, Hewlett Packard Enterprise and NetApp each cleared consensus, and two of them raised guidance, which bought them nothing. The buying went to Snowflake instead, up 24.1%. Asia at least stopped falling: Tokyo shed 0.17% after Wednesday's 2.85% drop and Seoul added 0.26% after losing 4%. American contracts are marked slightly lower, crude is more than 2% higher, and the yen is at its firmest since early August.
| Futures | Level | % Chg | Note |
|---|---|---|---|
| ES (S&P 500) | 7,671.50 | -0.07% | Cash index closed at 7,666.60 |
| NQ (Nasdaq 100) | 29,120.75 | -0.22% | Cash index closed 78 points under its 50-day |
| YM (Dow) | 53,130.00 | +0.02% | |
| RTY (Russell 2000) | 2,950.40 | -0.28% |
| Global | Level | % Chg | Note |
|---|---|---|---|
| Nikkei 225 | 64,214.48 | -0.17% | Topix rose 0.7% as exporters lagged |
| Kospi | 6,579.48 | +0.26% | Recovers a fraction of Wednesday's 4% loss |
| Hang Seng | 25,213.31 | -0.39% |
Europe is barely registering, with the FTSE 100, the DAX and the Stoxx 50 all within a quarter of a percent of Wednesday's closes.
In the News
Rates, FX, Commodities
Currencies supplied the overnight movement. The dollar index slipped 0.38% to 99.21 and the yen gained 1.5%, both of them driven by Tokyo. Treasuries have gone quiet by comparison, holding Wednesday's level for a third session after reaching 4.818% before noon, the highest reading since November 2023 according to CNBC. The other exception is crude, up around 2% on both benchmarks.
| Rates | Level | Note |
|---|---|---|
| 2-Year Treasury | 4.40% | Same level Tuesday and Wednesday |
| 10-Year Treasury | 4.79% | Reached 4.818% Wednesday morning |
| 30-Year Treasury | 5.27% | |
| 2s10s spread | 39 bp | |
| VIX | 15.42 | Up 1.4% from Wednesday's 15.20 |
| FX and Commodities | Level | % Chg | Note |
|---|---|---|---|
| Dollar index (DXY) | 99.21 | -0.38% | |
| USD/JPY | 156.30 | -1.49% | Yen firmest since August 3 |
| WTI Crude (Oct) | $93.06 | +2.25% | Fourth consecutive advance |
| Brent Crude (Nov) | $97.51 | +1.97% | $2.49 from three figures |
| Gold (Dec) | $4,473.60 | — | Spot near $4,451 early Thursday |
| Natural Gas | $2.997 | — |
Technicals
Both large-cap benchmarks sit under their 20-day averages. The S&P 500 at 7,666.60 is 42 points beneath a 20-day of 7,708.76 and 90 points clear of a 50-day at 7,576.70, leaving it 1.7% under the closing high of 7,798.99 it set on August 13. The Nasdaq 100 at 29,143.33 is below both a 20-day of 29,488.00 and a 50-day of 29,221.77. Ten-year notes at 4.79% have now spent three sessions within a few basis points of where they are now, which is odd company for a market pricing a rate rise in twelve days.
Breakouts. The energy sector fund (XLE) closed Wednesday at $65.10, its highest finish in twelve months, with crude adding another 2% since. GitLab (GTLB) at $49.59 sits $1.45 below the $51.04 it printed on November 3. Snowflake's premarket $380.00 clears the $337.38 close from August 13.
Breakdowns. NetApp (NTAP) closed at $180.77 and its premarket $166.00 would take it under a 50-day of $177.48. Zscaler (ZS) at $172.73 finished within a dollar of its own 200-day at $173.69, and reports tonight. Ciena (CIEN) at $370.00 in premarket trade is still beneath a 200-day of $375.89, and 41% below the $627.00 it reached on June 2.
Top Movers
Gainers
Snowflake (SNOW), +24.1% to $380.00. The data-warehouse company earned an adjusted 62 cents a share on $1.55 billion of revenue, against the 45 cents and $1.48 billion analysts carried, with revenue up 35% from a year earlier. The product line is what moved it: $1.49 billion, higher by 37%, and a third straight quarter in which that growth rate went up instead of down. Management now expects $6.07 billion of product revenue for the year, against the $5.84 billion it guided to in May. A software company whose growth accelerates three quarters running is rare enough that the market will pay almost anything for it.
Datadog (DDOG), +6.1% to $222.00. It fell 6.5% Wednesday alongside the rest of enterprise software and recovers most of that before the open.
Five Below (FIVE), +5.2% to $255.75. Net sales grew 22.9% to $1.26 billion and comparable sales 14.1%, with adjusted earnings of $1.68 a share against the $1.34 six analysts had penciled in. The full-year outlook rose to $5.63 billion to $5.71 billion of sales and $10.07 of adjusted earnings, and the board authorized a $600 million buyback.
Losers
Ultragenyx (RARE), -45.5% to $14.46. The Phase 3 Aspire study of apazunersen in Angelman syndrome missed its primary endpoint, a change from baseline in the Bayley-4 cognitive raw score, and missed the key secondary measure as well. The therapy showed no benefit against a sham treatment. Ultragenyx said it will decide the program's disposition, language that includes discontinuing it.
NetApp (NTAP), -8.2% to $166.00. Revenue rose 30% from a year earlier to $2.03 billion and adjusted earnings 66% to $2.58 a share, and full-year guidance went to $9.73 to $10.03 from $8.70 to $9.00. The cash statement is where the argument sits: operating cash fell 25% to $503 million and free cash flow 35% to $401 million, in a quarter when revenue grew thirty. Storage sold into artificial-intelligence build-outs is working capital before it is profit.
Hewlett Packard Enterprise (HPE), -3.3% to $50.12. Revenue of $12.2 billion grew 34%, adjusted earnings reached $1.11 a share, orders rose 42%, and the full-year earnings range moved up 40 cents to $3.75 to $3.85. It also lifted its fiscal 2027 framework, to 13% to 17% revenue growth and 16% to 20% growth in adjusted earnings per share, and the shares are lower anyway.
Broadcom (AVGO), -2.7% to $357.45. Third-quarter revenue of $29.59 billion beat the $29.36 billion expected and adjusted earnings of $3.32 a share beat $3.24, while artificial-intelligence semiconductor revenue of $16.7 billion grew 221% from a year earlier. Hock Tan guided that line to $21.7 billion this quarter, put the fiscal-year figure at $58 billion, and said production shipments of Google's next-generation inference chip have started. The trouble is one level up: $34.8 billion of fourth-quarter revenue sits under the $35.03 billion consensus, so the fastest-growing business in semiconductors is being marked down for the company it lives inside.
Key Macro Data Today
| Release | Time (ET) | Consensus | Prior |
|---|---|---|---|
| Initial jobless claims | 8:30 a.m. | 205,000 | 203,000 |
| Trade balance (Jul) | 8:30 a.m. | -$71.2bn | -$73.3bn |
| Productivity (Q2, final) | 8:30 a.m. | +0.3% | — |
| S&P Global services PMI (Aug) | 9:45 a.m. | 56.8 | — |
| ISM services (Aug) | 10:00 a.m. | 54.5 | 54.1 |
Claims have run in a narrow band all summer, so the release that matters is ISM services at 10:00. Its August employment sub-index is the last labor reading before the government's own count tomorrow, and it lands a day after ADP put private hiring at 38,000, the softest since January.
Earnings Today
Ciena (CIEN) reported before the open and trades 4.4% higher at $370.00. The optical-networking company earned an adjusted $2.11 a share for the fiscal third quarter, up 215% from 67 cents a year earlier, on revenue of $1.671 billion, higher by 37%. Analysts had carried earnings of $1.73 a share on revenue of $1.637 billion. Adjusted operating margin reached 22.5%, the full-year revenue outlook rose to $6.42 billion give or take $50 million, and the fourth quarter is guided to $1.75 billion on the same tolerance. Ciena has topped consensus earnings in each of the past four quarters, per Zacks, and the call is at 8:30 a.m. Eastern. Toro (TTC) also reports early, with earnings of $1.39 expected on revenue of $1.35 billion.
After the close it is Zscaler (ZS), where analysts look for earnings of $1.09 a share on revenue of $877 million and where the initial fiscal 2027 outlook already called for recurring-revenue growth to slow to 16% to 17%. Samsara (IOT) and American Eagle Outfitters (AEO) follow.
Drivers
- ISM services at 10:00 a.m. Eastern carries more weight than a consensus of 54.5 suggests. The survey's price sub-index has been running hot on energy and freight, and with crude up more than 2% again this morning that line feeds the argument Chair Warsh made at Jackson Hole. Claims at 8:30 are the counterweight, and 205,000 would keep them inside the summer band.
- Broadcom's numbers were the strongest in the semiconductor group and the stock is down 2.7%, the third time this week that an artificial-intelligence supplier has beaten and been sold. NetApp and Hewlett Packard Enterprise did the same overnight, while Ciena beat and rose 4.4%, so buyers are sorting the group instead of abandoning it. Which of those two behaviours holds gets tested at the open.
- Currency traders have moved twice this week on Bank of Japan speeches rather than on data, and Thursday's 1.5% yen gain came from a board member's remarks. Japan's policy meeting falls on September 17 and 18, two days after the Federal Open Market Committee. The Bureau of Labor Statistics releases August payrolls at 8:30 a.m. Eastern on Friday.