U.S. stock futures pointed to a stronger opening on Thursday, with technology shares leading early gains after Nvidia (NASDAQ:NVDA) delivered better-than-expected quarterly results and an encouraging revenue outlook.
Nasdaq 100 futures climbed around 1%, signalling renewed appetite for technology stocks after the major averages finished the previous session modestly lower.
Nvidia shares surged 6.5% in pre-market trading after the artificial intelligence chip leader exceeded second-quarter expectations and issued upbeat revenue guidance for the current quarter, providing fresh confidence in demand linked to AI infrastructure investment.
“Nvidia once again delivered stronger-than-expected results, providing some reassurance that the AI investment cycle remains intact,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
Nvidia provides fresh catalyst for technology stocks
Nvidia’s performance is expected to provide an important boost for the wider technology sector, given the company’s central role in the rapidly expanding artificial intelligence investment cycle.
The positive earnings reaction could help Wall Street regain momentum following a subdued previous session. Investors had largely avoided making significant moves ahead of Nvidia’s results, reflecting the company’s growing influence on broader market sentiment.
“Assuming there is no major movement in either a positive or negative direction in geopolitical terms, tonight’s second quarter results from Nvidia are likely to set the tone for markets through the remainder of the week,” said AJ Bell investment director Russ Mould.
Jackson Hole remains in focus
Despite the positive start indicated by futures, trading could remain relatively cautious as investors prepare for Federal Reserve Chairman Kevin Warsh’s speech at the Jackson Hole economic symposium on Friday.
Warsh has generally avoided providing detailed forward guidance on monetary policy, but investors will closely examine his comments for indications about the future path of interest rates.
Following the latest inflation figures, CME Group’s FedWatch Tool indicates a 66.1% probability that the Federal Reserve will leave rates unchanged next month and a 33.9% probability of a quarter-point increase.
Inflation data keeps rate outlook in spotlight
The latest personal consumption expenditures data showed U.S. inflation running slightly hotter than economists had anticipated.
The headline PCE price index increased 0.2% in July following a 0.1% decline in June, compared with expectations for a 0.1% increase. On an annual basis, the index rose 3.7%, unchanged from June and slightly above forecasts for a moderation to 3.6%.
Core PCE, which excludes food and energy, increased 0.2% month over month following a 0.1% rise in June, matching expectations. Annual core inflation remained at 3.3%, also in line with forecasts.
The figures reinforced expectations that the Federal Reserve will continue to take a measured approach as it assesses inflation and economic conditions.
Wall Street ended previous session slightly lower
The major U.S. averages finished the previous session modestly lower following a directionless day of trading. The Dow Jones Industrial Average declined 113.52 points, or 0.2%, to 53,463.88, while the Nasdaq Composite slipped 21.10 points, or 0.1%, to 26,130.20. The S&P 500 edged down 1.58 points, or less than 0.1%, to 7,675.70.
Sector performance was mixed. Gold stocks came under notable pressure as precious metal prices declined, sending the NYSE Arca Gold Bugs Index down 2.9%. Pharmaceutical shares also weakened, with the NYSE Arca Pharmaceutical Index falling 2%.
Technology-related areas performed more strongly. The NYSE Arca Computer Hardware Index advanced 1.9%, while the NYSE Arca Networking Index gained 1.6%. Natural gas stocks also strengthened, with the NYSE Arca Natural Gas Index rising 1.5% alongside higher commodity prices.
With Nvidia providing a strong technology catalyst and futures pointing higher, Wall Street appears positioned for a positive start. Attention is likely to remain divided between enthusiasm surrounding AI investment and Friday’s Jackson Hole speech as investors assess the next potential driver for U.S. markets.