(Reuters) – U.S. stock index futures were mixed as investors awaited new data to gauge the strength of the labor market, with Nasdaq futures rising as Nvidia’s rise fueled tech sector optimism.
Yesterday’s tech rally pushed the S&P 500 and Nasdaq to all-time highs, while a batch of weaker economic data bolstered predictions that the Federal Reserve could begin easing policy sooner than expected.
Tech megacaps are the main driver of the rally, with the tech sector advancing 2.7% thanks to lower Treasury yields. In premarket trading Meta Platforms, Microsoft and Apple lost between 0.03% and 0.2%.
Nvidia rose 1.2%, after exceeding the $3 trillion market valuation in the previous session and overtaking Apple as the second most valuable company in the world.
Gains from Nvidia and other AI-related players are 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-to-date, even if investors have to deal with fears that rates will remain high for longer than expected.
“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, yesterday’s May private sector payrolls data suggested an easing of labor market tension, ahead of key non-farm payrolls data due tomorrow.
According to CME’s FedWatch tool, traders now see a nearly 67% chance of a rate cut in September and expect about two cuts this year, according to Lseg data.
Analysts polled by Reuters also expect two cuts, but there is a significant risk that the Fed will opt for just one or none.
At 12.50 CET, futures on the Dow were down by 0.05%, those on the S&P 500 were unchanged, and futures on the Nasdaq 100 were up by 0.1%.
Lululemon Athletica jumped 7.5% after beating forecasts for first-quarter earnings and revenue yesterday, as its China business helped offset slowdowns in North America.
Victoria’s Secret, on the other hand, dropped 2.3% after reporting a drop in first quarter profits and revenues yesterday after the markets closed.
(Translated by Laura Contemori, editing Claudia Cristoferi)
