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Stocks: U.S. Futures Extend Gains as Recession Fears Ease

Investing.com -- U.S. stock futures were set to claw back more of their midweek losses on Friday, as the absence of fresh geopolitical shocks allowed the market to build on gains that began on Thursday with a batch of generally positive U.S. economic data.

By 6:50 AM ET, Dow futures were up 245 points, or 1.0% from late Thursday’s levels, while the S&P 500 Futures contract was up 27 points, also a gain of 1.0%.

The Nasdaq 100 futures contract was outperforming, with a gain of 1.3%, after a strong set of quarterly numbers from semiconductor maker Nvidia after the bell on Thursday encouraged hopes that the cycle for silicon chips may be turning up.

Nvidia (NASDAQ:NVDA) was indicated to open up 6.1% in premarket trade, while Taiwan Semiconductor (NYSE:TSM) was up 2.6% and Intel (NASDAQ:INTC) was up 1.3%. Advanced Micro Devices (NASDAQ:AMD) rose 3.4%

Nvidia said the steep drop in revenue over the last year that was caused by sharp declines in demand from cryptocurrency miners and data centers appears to be bottoming out. It said revenue will be down less than 10% from year-earlier levels in the current quarter. One other bright spot was a record quarter for automotive chip sales, suggesting that the long-foretold surge in computer power in autos may finally be on the way.

However, the sector – like the broader market – remains captive to the trade dispute between the U.S. and China, on which there was no major news overnight, and where the next major development may well be a retaliation by China to President Donald Trump’s proposed extension of import tariffs on Chinese goods.

“Trump’s offer to postpone half of the additional tariffs due on 1 September until later in the year could be viewed as a positive step, but in truth it is only a small gesture and at the moment it remains difficult to project a path to a more general de-escalation in the trade war,” said Mark Dowding, chief investment officer at Bluebay Asset Management, in a strategy note.

In the only major earnings report of the morning, agricultural machinery maker Deere & Co (NYSE:DE) cut its full-year profit forecasts after saying its sales fell 3% in the three months to July, although it said it still expects full-year sales to rise 5%. The stock has lost 16% since President Trump’s tariff announcement escalated the trade war with China at the end of last month.

"Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases," said Chief Executive Officer Samuel Allen.

"Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases," said Chief Executive Officer Samuel Allen.

Elsewhere, crude oil WTI futures were bouncing hard after a torrid week, rising 1.7% ahead of OPEC’s monthly report on the oil market. Gold futures were down 0.5% at $1,523.35 a troy ounce, while the dollar index, which tracks the greenback against a basket of developed market currencies, was up some 0.2% at 98.148 thanks to gains against the safe-haven yen and Swiss franc.

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