Premarket: Futures Rise as Broadcom's AI Strength and Mega-Cap Gains Drive Optimism

U.S. equity futures are pointing higher, with the S&P 500 futures up 0.4 percent, Nasdaq 100 futures gaining 0.9 percent, and DJIA futures edging 0.1 percent higher. The futures market is being lifted by Broadcom’s strong earnings report and AI-driven enthusiasm, alongside gains in mega-cap stocks.

Broadcom shares surged 17 percent following its earnings report, which featured in-line revenue and a modest earnings beat. The company guided first-quarter revenue above consensus and increased its dividend, reinforcing confidence in its AI-driven growth trajectory. This has rekindled investor optimism in AI-related names, a trend that continues to underpin market sentiment.

Mega-cap stocks also contributed to the futures’ rise, extending a year-long rally that has driven the Nasdaq to significant gains. Other corporate earnings played a supportive role. Costco reported a $0.03 earnings beat with strong adjusted comparable sales growth of 7.1 percent, while Restoration Hardware issued upbeat fourth-quarter revenue guidance, highlighting a positive inflection in demand despite a challenging housing market.

The broader market backdrop features mixed developments. Energy markets saw a boost, with WTI crude oil futures up 0.8 percent to $70.59 per barrel, following a report from the International Energy Agency forecasting accelerated global oil demand growth in 2025. Conversely, natural gas futures fell 1.5 percent amid supply stability and mild weather forecasts.

Geopolitical factors are also in focus. Reports that President-elect Trump is considering airstrikes to counter Iran’s nuclear ambitions add a layer of uncertainty, particularly for energy markets. Additionally, Trump’s transition team is reportedly exploring significant changes to bank regulatory agencies, including the potential elimination or downsizing of the FDIC. These developments could have far-reaching implications for financial stability and market dynamics.

In international markets, China and Hong Kong underperformed due to disappointment over the lack of specific stimulus measures from the Central Economic Work Conference. Meanwhile, in Europe, French President Macron’s appointment of Francois Bayrou as prime minister and European Central Bank policymakers advocating for further rate cuts reflect ongoing economic adjustments across the region.

Treasury yields edged higher, with the 2-year note yield rising by 2 basis points to 4.21 percent and the 10-year yield increasing by 3 basis points to 4.35 percent. The U.S. Dollar Index dipped slightly by 0.1 percent to 106.81, reflecting modest weakness in the greenback.

Looking ahead, investors will closely watch today’s release of the November Export-Import Price Index for additional insights into inflationary pressures. As markets navigate a landscape of corporate earnings, geopolitical tensions, and evolving economic policies, sentiment remains buoyed by resilient mega-cap performance and AI-driven optimism. However, risks tied to regulatory uncertainty and global growth trends warrant continued vigilance.