S&P 500 and Dow futures were little moved on Thursday as investors awaited new data to gauge the strength of the U.S. labor market, while Nasdaq futures rose on earnings from AI-booted Nvidia, which increased optimism about the technology sector.
Wednesday’s tech rally pushed the S&P 500 and Nasdaq to record highs, while a slew of falling economic data fueled bets that the Federal Reserve could begin easing policy sooner than expected.
Megacap technology stocks were the main driver of the rally, with the tech sector gaining nearly 2.6% as Treasury yields fell. Stocks including Meta Platforms, Microsoft and Apple fell between 0.04% and 0.3% in premarket trading.
However, chipmaker Nvidia rose 1.0%, having surpassed the $3 trillion market valuation in the previous session, which saw it overtake Apple as the world’s second most valuable company.
Gains from Nvidia and other AI players have been the main driver of Wall Street’s recent rally, with the chipmaker accounting for about a third of the S&P 500’s gains, or more than 12% year-over-year, even as investors grappled with concerns about a rise in U.S. interest rates.
“The fact that Nvidia is now worth more than Apple is impressive… there’s a sense that as long as Nvidia’s stock price goes up, investors are happy and all is well in the markets,” said Russ Mould, chief investment officer by AJ Bell.
On the macro front, May private payrolls data on Wednesday suggested an easing of labor market tightness, ahead of the crucial non-farm payrolls report due on Friday.
Traders now see a nearly 67% chance of a rate cut in September, according to the CME’s FedWatch tool, and have priced in about two cuts this year, according to LSEG data.
Forecasters interviewed by Reuters also expect two cuts, but there is a significant risk that the Fed will opt for just one or none.
Weekly jobless claims data and international trade data for April are expected on Thursday.
As of 5:54 am ET, Dow e-minis were down 17 points, or 0.04%, S&P 500 e-minis were down 1.75 points, or 0.03%, and Nasdaq 100 e-minis were up 8.5 points, or 0.04%.
Among individual names, Lululemon Athletica jumped 7.1% after beating first-quarter profit and revenue expectations on Wednesday, as its China business helped offset slowdowns in North America.
Meanwhile, Victoria’s Secret fell 2.5% after reporting a decline in first-quarter earnings and revenue after markets closed on Wednesday.
