US stock futures rise as Nvidia losses ease; PCE inflation awaited

U.S. stock index futures rose in evening deals on Thursday as a rout in technology stocks eased after earnings from Nvidia Corp showed artificial intelligence-fueled demand still remained in play.

Optimism over interest rate cuts also kept Wall Street close to record highs, with focus turning squarely to upcoming PCE price index data- the Federal Reserve’s preferred inflation gauge- due later in the day. 

S&P 500 Futures rose 0.1% to 5,614.150 points, while Nasdaq 100 Futures rose 0.2% to 19,425.50 points by 20:01 ET (00:01 GMT). Dow Jones Futures steadied at 41,435.0 points.  PCE data awaited for more rate cut cues 

Focus on Friday will be largely on PCE price index data for July.

The reading is expected to show a slight pick-up in inflation through the prior month, while inflation is also expected to remain largely above the Federal Reserve’s 2% annual target.

Markets are still pricing in a rate cut in September, following a slew of dovish signals from Fed officials. But any signs of inflation remaining sticky could alter this trend. 

Signs of an increase in inflation could shift expectations towards a smaller, 25 basis point cut in the coming month. Traders are pricing in a 68% chance for a 25 bps cut, and a 32% chance for a 50 bps cut, CME Fedwatch showed. 

Gross domestic product data released on Thursday showed the U.S. economy grew more than initially estimated in the second quarter. Other data showed a slightly bigger than expected dip in jobless claims .

Signs of resilience in the U.S. economy give the Fed less impetus to cut interest rates sharply. But this trend also furthered expectations that the economy was headed for a soft landing, spurring flows into more economically sensitive stock sectors.  Nvidia rises in aftermarket trade, broader tech rout eases 

Market darling NVIDIA Corporation (NASDAQ:NVDA ) rose around 1% in after-hours trading after sinking 5% during Thursday’s session.

The firm’s revenue and gross margin outlook disappointed some investors expecting stronger growth. But analysts largely maintained their bullish outlook on the stock, after the firm blew past expectations with its quarterly earnings.

A rout in technology stocks also eased on Thursday, as Nvidia’s earnings showed AI-fueled demand still remained in play. Tech stocks had tumbled in the run-up to the earnings, also coming under pressure from investors pivoting into more economically sensitive sectors.

Wall Street indexes were mixed. The Dow Jones Industrial Average rose 0.6% to a record high of 41,335.05 points on Thursday, while losses in Nvidia pulled the NASDAQ Composite down 0.2% to 17,516.43 points, while the S&P 500 ended flat at 5,592.0 points. 

Source: Investing.com