In the realm of U.S. stock index futures, the evening hours of Thursday witnessed a determined effort to regain ground lost earlier in the trading session. This endeavor followed a day marked by significant declines, fueled by concerns over persistent inflation and the looming specter of potential interest rate hikes. Despite the backdrop of apprehension, positive earnings reports from tech titan Nvidia offered a glimmer of optimism.
Nvidia Corporation (NASDAQ: NVDA) soared to unprecedented heights, propelled by an impressive first-quarter earnings report that exceeded expectations. The market response was palpable, with Nvidia shares reaching record highs. However, as the trading day drew to a close, the stock appeared to lose some momentum during after-hours trading on Friday.
S&P 500 Futures, reflecting the broader market sentiment, managed a modest 0.1% increase to 5,288.75 points, while Nasdaq 100 Futures stabilized at 18,704.25 points by 19:47 ET (23:47 GMT). Dow Jones Futures held firm at 39,152.0 points.
Following its remarkable ascent to $1,063.0 during Thursday’s session, Nvidia experienced a slight decline of 0.3% in aftermarket trading. Nevertheless, Nvidia’s exceptional performance in the first quarter, coupled with an optimistic outlook for the second quarter and the announcement of a 10-for-one stock split, initially buoyed investor confidence.
Although Nvidia’s stellar performance initially lifted broader technology stocks amid hopes of increased demand for artificial intelligence, these positive developments were somewhat tempered by concerns about sustained high interest rates in the U.S., particularly following hawkish signals from the Federal Reserve.
Despite these broader concerns, Nvidia’s prominence as the third-largest company on Wall Street played a role in mitigating losses across benchmark stock indexes.
In contrast, Thursday witnessed significant market losses driven by worries about inflation and interest rates, exacerbated by indications from the Federal Reserve suggesting policymakers were increasingly alarmed by persistent inflationary pressures. The S&P 500 declined by 0.7% to 5,267.84 points, while the NASDAQ Composite slipped by 0.4% to 16,736.03 points. The Dow Jones Industrial Average, with lower exposure to technology stocks compared to its counterparts, experienced the most significant decline, falling by 1.5% to 39,065.26 points.
Minutes from the Fed’s late-April meeting, along with hawkish remarks from several Fed officials, underscored the central bank’s concerns about slower progress towards achieving its 2% inflation target. As a result, traders adjusted their expectations, with the CME Fedwatch tool indicating nearly equal probabilities of the Fed maintaining or cutting interest rates in September, around 46% each.
Thursday’s market losses put the S&P and the Dow on track for weekly declines, while the Nasdaq pared back some of its weekly gains. Despite reaching record highs earlier in the week, all three indexes faced selling pressure, possibly due to profit-taking.