Futures stall after tech-led rally; Nvidia continues to rise

By Lisa Pauline Mattkal and Johan M. Cherian

(Reuters) – Standard & Poor’s 500 and Dow Jones futures were little changed on Thursday as investors awaited new data to gauge the strength of the U.S. labor market, while Nasdaq futures rose as gains at artificial intelligence favorite Nvidia boosted optimism about the technology sector. .

A tech rally on Wednesday pushed the S&P 500 and Nasdaq to all-time highs, as a string of weak economic data fueled bets that the Federal Reserve could start easing policy sooner than previously expected.

Big tech stocks were the main driver of the rally, with the technology sector rising nearly 2.6% as Treasury yields fell. Stocks including Meta Platforms, Microsoft and Apple fell between 0.04% and 0.3% in pre-market trading.

However, chip maker Nvidia rose 1.5%, after its market cap surpassed $3 trillion in the previous session which saw it overtake Apple to become the world’s second most valuable company.

Gains by Nvidia and other AI-related companies have been the main driver of the recent rally on Wall Street, with the chipmaker accounting for nearly a third of the S&P 500’s more than 12% year-to-date gain, even as… In which investors grapple with concerns about higher interest rates for a longer period in the United States.

“We expect the semiconductor-led AI rise to broaden in the second half of this year and beyond, continuing as big technology and key AI sectors like GPUs, custom chips, foundries and semi-finished equipment,” analysts at UBS said. He wrote in a note.

On the macro front, May payrolls data on Wednesday indicated an easing of labor market tightness, ahead of the important non-farm payrolls report due on Friday.

Traders now see about a 67% chance of a rate cut in September, according to the Chicago Mercantile Exchange’s FedWatch tool, and have priced in about two cuts this year, according to data from LSEG.

Forecasters polled by Reuters also expect two cuts, but there is a high risk that the Fed will opt for just one cut or none at all.

Weekly jobless claims data and international trade figures for April are due later on Thursday.

At 7:08 a.m. EST, the Dow Jones e-mini was down 18 points, or 0.05%, the S&P 500 e-mini was up 0.5 points, or 0.01%, and the Nasdaq 100 e-mini was up 17.75 points, or 0.09. %.

Among other stocks, Lululemon Athletica jumped 8.2% after beating first-quarter profit and revenue expectations on Wednesday, as its China business helped offset a slowdown in North America.

US-listed Nio shares fell 7.2% after the Chinese electric car maker reported a quarterly net loss and said it expects electric vehicle deliveries in the second quarter to more than double from a year ago.

The story continues

Victoria’s Secret lost 1.8% after reporting lower first-quarter profit and revenue after markets closed on Wednesday.

Five Below stock fell 15.8% after the discount store operator cut its forecast for annual net sales.

Sealed Air rose 1.4% after brokerage firm Mizuho upgraded the stock to “buy” from “neutral.”

(Reporting by Lisa Mattakal and Johann M. Cherian in Bengaluru; Editing by Shinjini Ganguly)