(Reuters) – The S&P 500 and Dow futures were little changed on Thursday as investors waited for new data to gauge the strength of the U.S. labor market, while Nasdaq futures edged higher as gains in AI favorite Nvidia stimulated optimism around the technology sector.
A technology rally on Wednesday pushed the S&P 500 and the Nasdaq to record highs after a series of weakening economic data raised expectations that the Federal Reserve could start easing policy sooner than previously expected.
Mega-cap tech stocks were the main driver of the rally, with the technology sector gaining almost 2.6% as government bond yields fell. Shares including Meta Platforms, Microsoft and Apple fell between 0.04% and 0.3% in premarket trading.
Chipmaker Nvidia, however, rose 1.0% after surpassing $3 trillion in market value in the previous session, during which it overtook Apple as the world’s second most valuable company.
Gains at Nvidia and other AI-related players have been the main driver of the recent rally on Wall Street, with the chipmaker accounting for about a third of the S&P 500’s 12%-plus gain so far this year, including though investors have been grappling with concerns about U.S. interest rates lasting longer and longer.
“The fact that Nvidia is now worth more than Apple is striking… there is a sense that as long as Nvidia’s share price is rising, investors are happy and all is well in the markets,” said Russ Mould, investment director at AJ Bell. .
On the macro front, May private payrolls data on Wednesday pointed to an easing of labor market tightness ahead of the crucial nonfarm payrolls report due on Friday.
Traders now see a nearly 67% chance of a rate cut in September, according to CME’s FedWatch tool, and have priced in about two cuts this year, according to LSEG data.
Forecasters polled by Reuters also expect two cuts, but there is a significant risk that the Fed will opt for just one or none at all.
Data on April’s weekly jobless claims data and international trade figures will be released later on Thursday.
At 5:54 a.m. ET, the Dow e-minis were down 17 points (0.04%), the S&P 500 e-minis were down 1.75 points (0.03%), and the Nasdaq 100 e-minis were down 8.5 points ( 0.04%) higher.
Among individual names, Lululemon Athletica rose 7.1% after beating expectations for first-quarter profit and revenue on Wednesday, as its China-based operations helped offset slowdowns in North America.
Meanwhile, Victoria’s Secret lost 2.5% after lower profit and revenue in the first quarter after markets closed on Wednesday.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)
