US futures inch higher as rate cut bets, Nvidia rally bring record highs

Investing.com-- U.S. stock index futures rose slightly in evening deals on Wednesday, extending gains after persistent bets on interest rate cuts and a rally in heavyweight Nvidia put Wall Street at record highs.

A series of weak labor market readings drummed up hopes that the Federal Reserve will begin cutting rates by September. But gains in futures were held back by anticipation of more upcoming economic data in the coming days. 

S&P 500 Futures rose 0.1% to 5,370.75 points, while Nasdaq 100 Futures rose 0.1% to 19,098.50 points by 19:13 ET (23:13 GMT). Dow Jones Futures steadied at 38,897.0 points. 

Nvidia extends rally in aftermarket trade

Market darling NVIDIA Corporation (NASDAQ:NVDA) hit a record high in after-hours trade, rising 1.1% to $1,237.40.

The stock surged on Wednesday, crossing $3 trillion in valuation and overtaking Apple Inc (NASDAQ:AAPL) as the second-largest company on Wall Street amid growing hype over its exposure to artificial intelligence. The firm had earlier this week revealed its newest line of AI chips.

Sentiment over AI was also upbeat ahead of Apple’s developer conference next week, where the tech giant is widely expected to unveil AI features for its flagship devices. 

Wall St at record highs as weak labor data fuels rate cut hopes 

Nvidia was the biggest boost to the S&P 500 and the NASDAQ Composite, which both closed at record highs on Wednesday.

The S&P 500 rose 1.2% to 5,354.03 points, while the Nasdaq rose nearly 2% to 17,186.38 points. The Dow Jones Industrial Average lagged, rising 0.3% to 38,807.33 points, and was well below peaks hit in May.

Weak ADP private payrolls data, which came on the heels on a softer-than-expected reading on job openings, fueled bets that the labor market was cooling, which heralds softer inflation and gives the Federal Reserve more impetus to cut interest rates. 

Traders ramped up bets that the Fed will cut rates by 25 basis points in September. Additionally, a rate cut by the Bank of Canada on Wednesday, and a widely expected cut by the European Central Bank on Thursday also fueled optimism over looser monetary policy.

Focus was now on more upcoming readings on the labor market, with nonfarm payrolls due on Friday set to offer definitive cues on the sector.

The Fed is also set to meet next week, and is likely to keep rates steady. 

After-hours movers: Lululemon surges, Five Below tumbles 

Sportswear retailer Lululemon Athletica Inc (NASDAQ:LULU) jumped 10% after clocking stronger-than-expected quarterly earnings, while also raising its annual guidance.

Discount retailer Five Below Inc (NASDAQ:FIVE) slid 17% after posting a disappointing forecast for full year earnings.