U.S. stock index futures took a step back on Friday, easing after a powerful rally sparked by results from chipmaker Nvidia that fueled enthusiasm over a possible artificial intelligence revolution.
What is going on
-
Futures Dow Jones Industrial Average YM00
fell 5 points, or 0%, to 39118. -
S&P 500 Futures ES00
fell 2 points, or 0%, to 5096. -
Futures Nasdaq-100 NQ00
fell 27 points, or 0.2%, to 18021.
Thursday, the Dow Jones Industrial Average
the S&P 500 index rose 457 points, or 1.18%, to 39069
rose 105 points, or 2.11%, to 5,087, and the Nasdaq Composite
it gained 461 points, or 2.96%, to 16042.
The S&P 500 posted its 12th record of the year, while the Nasdaq Composite closed just 0.1% away from the new record.
Distressed small-cap companies also rallied, with the Russell 2000 rising
up 1%.
What drives the markets
Nvidia NVDA
will still be in the spotlight Friday after the company’s stock price jumped 16% Thursday on the back of fourth-quarter revenue and first-quarter sales outlook, easily beating analysts’ expectations. Nvidia’s surge has made it the third most valuable stock in the S&P 500 index, now ahead of both Alphabet GOOGL
and Amazon.com AMZN.
Investors heeded Nvidia CEO Jensen Huang’s claim that artificial intelligence had “reached its tipping point.”
“We believe generative AI will prove to be the growth theme of the decade, and Nvidia’s earnings report demonstrates the current strength of AI infrastructure spending,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Federal Reserve Governor Lisa Cook, in a speech delivered Thursday after the stock market closed, said it will take time for artificial intelligence to have an impact on productivity. “History shows that the journey from the invention of generic technologies to innovation to productivity can be long and bumpy. Although the adoption of generative AI is happening at a rapid pace, the full benefit of a technology requires complementary investments as well as changes in business structure, management practices and worker training,” she said.
Cook said current monetary policy was restrictive, but she also said she wanted greater confidence in inflation converging to 2% before cutting interest rates.
Fed Governor Christopher Waller made a similar point in a speech Thursday after the stock market closed. “I still expect it will be appropriate this year to start easing monetary policy, but the start of policy easing and the number of rate cuts will depend on the incoming data,” Waller said.
There are more earnings reports on the agenda, including from Warner Bros. Discovery WBD
and Icahn Enterprises IEP.
Intuitive Machines LUNR stock
rallied in premarket trading after the company’s Odysseus spacecraft reached the moon and began sending signals to Earth.