Morgan Stanley and Cisco Shine, S&P 500 Eyes Rebound in Today’s Trading

Stock Futures Hold Steady as Wall Street Seeks Rebound

Stock futures were relatively flat Wednesday as Wall Street monitored for signs of a potential rebound in equities. Futures tied to the S&P 500 and Dow Jones Industrial Average were unchanged, while Nasdaq 100 futures edged up by 0.1%. The market remains focused on whether major indices can bounce back to their recent highs after Tuesday’s losses.

Tech Stocks Weigh on Tuesday’s Performance

In the previous session, the Dow and S&P 500 both retreated from their record levels, slipping 0.75% and 0.76%, respectively. The Nasdaq Composite fell by 1.01%, largely dragged down by tech stocks, particularly semiconductor companies. Nvidia shares dropped more than 4%, contributing to a 1.8% decline in the technology sector, which pressured both the S&P 500 and the Nasdaq.

Earnings season has been mixed so far, with positive reports from some major banks being offset by more cautious outlooks from companies like UnitedHealth Group and Dutch chipmaker ASML. The uncertain earnings environment, combined with concerns surrounding the U.S. presidential election, has led to choppy trading conditions. Bryn Talkington of Requisite Capital Management warned that volatility is likely to persist until the election passes, with investors navigating both earnings and political headlines.

Morgan Stanley and Cisco Among Pre-market Movers

Morgan Stanley shares rose more than 3% in premarket trading after reporting better-than-expected third-quarter earnings. The bank’s results, driven by strong performance in wealth management, trading, and investment banking, showed earnings per share of $1.88 versus Wall Street’s estimate of $1.58. Revenue also topped expectations, coming in at $15.38 billion.

Cisco Systems also gained nearly 2% premarket following a bullish upgrade from Citi, which cited the potential for artificial intelligence to play a larger role in Cisco’s business over time. Additionally, Novocure saw its shares soar over 20% after the FDA approved a new cancer treatment device.

HSBC Predicts Near-term Stock Market Rally

In a note released Wednesday, HSBC broke from market consensus by predicting a near-term rally for equities. Despite widespread caution surrounding seasonality and political uncertainty, HSBC’s Max Kettner argued that low near-term earnings expectations could create an opportunity for a squeeze higher. The bank’s outlook contrasts with many others that are cautious about the period leading up to the U.S. presidential election, though HSBC remains skeptical about a large post-election rally.

Market Forecast: Potential for Near-term Upside

While mixed earnings reports and election uncertainty are contributing to short-term market volatility, traders may see opportunities in undervalued sectors. With Morgan Stanley reporting strong financial results and tech stocks like Cisco showing resilience, there is potential for a near-term upside, especially if market sentiment improves as earnings season progresses. However, continued caution is warranted as election-related volatility looms.