Nasdaq, S&P 500 futures pop as Nvidia fuels chip stocks rally

Nasdaq, S&P 500 futures pop as Nvidia fuels chip stocks rally
US STOCKS-Nasdaq, S&P 500 futures pop as Nvidia fuels chip stocks rally

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Futures: Dow flat, S&P up 0.46%, Nasdaq up 0.80%

May 23 (Reuters)Futures tracking the tech-heavy Nasdaq and the benchmark S&P 500 climbed on Thursday as chip stocks rallied after Nvidia’s upbeat revenue forecast cemented investor optimism around the meteoric rise of artificial intelligence technology.

AI chip leader Nvidia NVDA.O jumped 6.8% in premarket trading, breaching the $1,000 mark for the first time ever and on track to add about $155 billion in market value if gains hold.

The semiconductor bellwether also announced a stock split, following an over 90% surge in its shares this year and a threefold jump in 2023 that have made Nvidia the third-most valuable U.S. stock.

“Nvidia’s earnings supported our expectations that the AI rally has plenty of more room to run… We stay positive on the AI trend and maintain our preference for big tech given the advantageous market positions,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Other chip stocks including Advanced Micro Devices AMD.O, Micron Technology MU.O, Broadcom AVGO.O, and Arm Holdings ARM.O advanced between 2.2% and 3.8%.

AI-related stocks also rose, with Super Micro Computer SMCI.O, C3.ai AI.N, Palantir Technologies PLTR.N and SoundHound AI SOUN.O gaining between 1.4% and 4.4%.

Meanwhile, Wall Street’s main indexes closed lower on Wednesday as investors digested minutes of the Federal Reserve’s latest policy meeting. Rate-setters indicated they still had faith price pressures would ease at least slowly in coming months, but doubts emerged about whether the current level of interest rates was high enough to ensure that outcome.

Traders currently expect the U.S. central bank to reduce its interest rates by nearly 40 basis points by year-end. FEDWATCH

Markets are also eyeing economic data scheduled through the day including weekly jobless claims, S&P Global flash PMIs and housing figures.

At 4:44 a.m. ET, Dow e-minis 1YMcv1 were down 5 points, or 0.01%, S&P 500 e-minis EScv1 were up 24.5 points, or 0.46%, and Nasdaq 100 e-minis NQcv1 were up 149.5 points, or 0.8%.

The Cboe Volatility Index .VIX, also known as Wall Street’s “fear gauge”, hit its lowest levels since November 2019.

Among other premarket movers, data cloud analytics firm Snowflake SNOW.N advanced 4.3% after forecasting second-quarter product revenue above estimates and raising its annual expectations.

U.S.-listed shares of Taiwanese contract chipmaker TSMC TSM.N rose 3.2% after forecasting an annual revenue growth of 10% in the global semiconductor industry, excluding memory chips.

DuPont DD.N climbed 4.4% on the U.S. conglomerate’s plans to split into three publicly traded companies.

Reporting by Ankika Biswas in Bengaluru; Editing by Devika Syamnath

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