S&P 500, Nasdaq futures rise as Nvidia pops on strong outlook

Investing.com-- S&P 500 and Nasdaq futures rose in evening deals on Wednesday, with the latter leading gains as optimism over a strong outlook from AI darling Nvidia drove investors into technology stocks.

Dow futures, however, were muted following a string of other weak earnings reports, while the minutes of the Federal Reserve’s late-January meeting showed the bank in no hurry to begin cutting interest rates. 

S&P 500 Futures rose 0.4% to 5,018.75 points, while Nasdaq 100 Futures futures rose 0.9% to 17,688.25 points by 18:12 ET (23:12 GMT). Dow Jones Futures fell 0.1% to 38,646.00 points. Outsized gains in the Nasdaq indicated increased appetite for technology stocks.

Gains in futures came following a series of middling sessions on Wall Street, as investors locked-in recent profits before quarterly earnings from NVIDIA Corporation (NASDAQ:NVDA), to see whether the firm could justify a massive valuation spike on the back of growing demand for artificial intelligence. 

The S&P 500 rose 0.1% to 4,981.80 points on Wednesday. The Dow Jones Industrial Average rose 0.1% to 38,612.24 points, while the NASDAQ Composite fell 0.3% to 15,580.87 points. 

Nvidia surges as Q4 results, outlook beat expectations, lifts tech sector 

Shares of Nvidia jumped 7.4% to $724.70 in aftermarket trade, coming back within sight of record highs hit earlier in February. 

The world’s most valuable chipmaker clocked stronger-than-expected fourth quarter earnings, and forecast first quarter revenue at about $24 billion, more than what analysts were expecting. 

The strong earnings and outlook signaled that the firm expected to continue reaping the benefits of increased demand for AI development, given that it is a key producer of chips geared specifically towards the large-language models which surged in popularity through 2023. 

Nvidia’s gains spilled over into other major tech stocks, given that investors expect AI demand to also boost the broader tech sector in the coming months. Alphabet Inc (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT) and Meta Platforms Inc (NASDAQ:META)- all three of which have AI products in the pipeline- rose between 0.2% and 1.4% in aftermarket trade. 

Major chipmaking stocks- which are expected to benefit from increased AI demand- also surged in aftermarket trade. TSMC's (NYSE:TSM) U.S. shares jumped 3.3%, while Micron Technology Inc (NASDAQ:MU) and Intel Corporation (NASDAQ:INTC) added 1.6% and 0.9%, respectively. 

Palantir Technologies Inc (NYSE:PLTR), Advanced Micro Devices Inc (NASDAQ:AMD) and Super Micro Computer Inc (NASDAQ:SMCI) surged between 3.7% to 9%. 

Doubts over interest rates, mixed earnings persist 

But despite optimism over tech, weakness in Dow futures signaled that investors were still somewhat on edge over higher-for-longer interest rates, while other earnings were somewhat mixed. 

The Fed minutes largely reiterated the central bank’s stance on keeping interest rates elevated in the near-term.

Among aftermarket decliners, Etsy Inc (NASDAQ:ETSY) fell 8.4% after the e-commerce firm clocked mixed earnings and guidance, while Rivian Automotive Inc (NASDAQ:RIVN) slid 15% after the electric vehicle maker forecast a disappointing production figure for 2024.