US pre-open: Futures little changed following Nvidia's record-setting rally

Wall Street futures were little changed ahead of the bell on Thursday as market participants awaited the release of this week's jobless claims data from the Labor Department.

As of 1230 BST, Dow Jones futures were down 0.05%, while S&P 500 and Nasdaq-100 futures were up 0.02% and 0.11%, respectively.

The Dow closed 96.04 points higher on Wednesday, while the S&P 500 and Nasdaq-100 both notched a fresh record close thanks to a rally in chipmaker Nvidia that saw it top a $3.0trn market valuation and surpass Apple in value.

Trade Nation's David Morrison said: "US stock indices found some positive direction yesterday, after several rollercoaster sessions. While the Dow lagged, the S&P 500 and Nasdaq-100 closed out at record highs. Both indices were lifted by a 6% rally in Nvidia, a move which took the chip giant's market capitalisation above $3.0trn, overtaking Apple and just behind Microsoft on the leaderboard for the world's biggest companies. Sentiment also got a boost from rising speculation that the US Federal Reserve could make two 25-basis point rate cuts by the end of this year. The ISM services PMI came in above expectations and posted its highest reading since September 2023. This helped to offset disappointment after Monday's ISM manufacturing PMI once again indicated contraction in the sector. Manufacturing has been problematic for a while now, having contracted for 18 out of the past 19 months."

On the macro front, US-based employers announced 64,789 cuts in April, according to Challenger, Gray & Christmas, down 28% from March's 14-month high of 90,309 and the 66,995 cuts announced at the same time a year earlier. However, the reading was still consistent with a tight labour market, but as labour costs continue to rise, companies will likely be slower to hire and further cuts will be needed in the coming months.

Still to come, jobless claims data will be out at 1330 BST, as will April goods trade balance figures.

Wall Street traders were also looking ahead to Friday’s nonfarm payrolls report for May, with investors on the hunt for signs of a weakening labour market, which could support rate cuts from the Federal Reserve.

In the corporate space, sportswear maker Lululemon traded higher after it beat first-quarter expectations, while Five Below was down double-digits on the back of weaker-than-expected results and guidance.

Also of note, the yield on the benchmark ten-year Treasury note slipped back below 4.30%, helping boost sentiment across the board following a rise in bond yields towards the end of last month.

Reporting by Iain Gilbert at Sharecast.com