US stock futures rise as Nvidia cheer offsets Fed jitters

Investing.com-- U.S. stock index futures rose in evening deals on Wednesday, led chiefly by technology stocks after positive earnings and guidance from market darling Nvidia sparked a rally in the sector. 

Optimism over the firm, which is considered as a bellwether for tech and artificial intelligence demand, largely overshadowed persistent concerns over sticky U.S. inflation and high interest rates- which were furthered by the minutes of the Federal Reserve’s late-April meeting. 

S&P 500 Futures rose 0.2% to 5,340.75 points, while Nasdaq 100 Futures rose 0.5% to 18,872.00 points by 20:04 ET (00:04 GMT). Dow Jones Futures lagged, falling 0.1% to 39,739.0 points. 

Nvidia surges on positive Q1, boosts chipmaking shares 

NVIDIA Corporation (NASDAQ:NVDA) rallied as much as 6% in aftermarket trade, reaching a record high of $1,006.95 a share after its first quarter earnings blew past estimates. The firm also offered up a stronger-than-expected revenue forecast for the current quarter, as it continued to benefit from strong demand in the growing AI industry. 

Nvidia also announced a 10-for-one forward stock split. 

The chipmaker’s earnings signaled that demand from the AI industry remained strong, which in turn boosted shares of other major chipmakers. Peers Advanced Micro Devices Inc (NASDAQ:AMD) and Broadcom Inc (NASDAQ:AVGO) rose about 2% each, while Intel Corporation (NASDAQ:INTC) added 0.5%.

Memory chip maker Micron Technology Inc (NASDAQ:MU) rose 2.4%, while chip designer Arm Holdings (NASDAQ:ARM) rose 3.2%. 

Gains in Nvidia spilled over into the broader tech sector.

Fed jitters limit optimism, Wall St falls 

But while positive earnings from Nvidia heralded gains for tech stocks, broader equities remained skittish amid growing concerns over high for longer interest rates, especially after repeated warnings from the Fed on sticky inflation.

The minutes of the central bank’s meeting cemented fears that the Fed was growing less confident that inflation was moving sustainably back towards its 2% annual target.

A string of Fed officials also echoed this notion in recent weeks. While markets were still holding out hope for a September rate cut, future inflation readings are likely to determine the possibility of such a scenario.

Wall Street indexes closed lower on Wednesday amid this angst. The S&P 500 fell 0.3% to 5,307.01 points, while the NASDAQ Composite fell 0.2% to 16,801.54 points. The Dow Jones Industrial Average fell 0.5% to 39,671.04 points, with all three indexes falling from record highs hit earlier in the week. 

Adding to concerns over high rates, Goldman Sachs CEO David Solomon said he did not expect any rate cuts in 2024. 

Aftermarket moves: Live Nation sinks on report of DOJ lawsuit 

Among major aftermarket movers, Live Nation Entertainment Inc (NYSE:LYV) sank as much as 9% on a report that the Department of Justice was planning a lawsuit against the firm over allegedly monopolistic practices by its Ticketmaster unit, and that lawmakers were also seeking a separation of Ticketmaster from the firm. 

News Corp (NASDAQ:NWSA) surged over 4% after it signed a content sharing deal with OpenAI, granting the latter access to content from several of its biggest publications.