US pre-open: Stock futures edge higher ahead of FOMC minutes, Nvidia earnings

(Sharecast News) - US stock futures pointed to a higher open on Wednesday, with indices set to rebound after three days of declines, though gains are likely to be limited as investors refrain from building positions ahead of two key risk events: minutes of the latest Federal Reserve meeting and an earnings release from Nvidia.

With two hours to go before Wall Street opens, Dow futures were up 0.2%, S&P 500 futures were up 0.3% and Nasdaq futures were up 0.6%, with the latter in particular looking to partially bounce back after losing 2.9% since Thursday's record closing high.

Details from the 28-29 April Federal Open Market Committee meeting will be published at 1900 BST (1400 ET), while Nvidia's results are due out after the closing bell.

Dampening stocks over recent sessions has been a sell-off in the bond market, with the 10-year US Treasury yield hitting a 16-month high and the 30-year yield rising to its highest since 2007.

"These moves came as the markets continue to price in raised inflation expectations because of the ongoing war between the US and Iran, and the continued closure of the Strait of Hormuz," said David Morrison, senior market analyst at Trade Nation.

The yield on a 10-year US Treasury note was down 3.1 basis points at 4.641% ahead of the open, while the 30-year yield eased 2bp to 5.163%.

"Traders are also girding their loins ahead of chip-giant NVIDIA's earnings release after tonight's close. NVIDIA is the world's largest company by market capitalisation and has been one of the main drivers of stock market gains from the lows of October 2022. So, what happens here matters. A look at options positioning ahead of the release suggests that traders are preparing for a swing of 6.5% in both directions, although there's a slight bias towards a bullish outcome," Morrison said.

In pre-market trade at least, Nvidia futures were up 1.6% after dropping 6.4% over the past three days. Chip peers Intel, Broadcom, Micron Technology and AMD were also set to rebound after recent heavy falls.

A host of other corporate earnings were keeping investors busy ahead of the bell, with Target and VF Corp impressing the market, while Lowe's and Hasbro underwhelmed.

In economic data, US mortgage applications fell 2.3% in the second week of May, according to the Mortgage Bankers Association, pulling back after a 1.7% gain the preceding week amid ongoing economic uncertainty and higher mortgage rates.