Futures tied to the S&P 500 and Nasdaq 100 rebounded on Wednesday, as strong results from embattled neocloud firm CoreWeave helped investors look past worries about excessive spending on artificial intelligence. The company's stock jumped more than 10% in premarket trading after CoreWeave said it would become profitable on an adjusted basis in the first half of 2028, alleviating concerns about its debt burden.
Equities have been caught in a tug of war this week, with fears over slower data center deployment pitted against a willingness to buy the dip. The hotter-than-expected inflation data released on Tuesday complicated the picture, reinforcing expectations that the Federal Reserve may need to raise interest rates next month.
At 5:04 a.m. ET, S&P 500 E-minis were up 55.75 points, or 0.74%, while Nasdaq 100 E-minis climbed 465.25 points, or 1.67%. Dow E-minis edged 15 points, or 0.03%, higher.
“I expect continued investments on AI infrastructure, which will drive share prices higher in time, even though multiples are compressed because of concerns over politics,” said Eric Schiffer, chairman of The Patriarch Organization, a Los Angeles-based family office.
Rate fears linger
US consumer prices increased more than expected in October amid higher costs for food and accommodation, data on Tuesday showed. Traders see a hike next month as a certainty, with an 11.5% chance of a half-percentage-point increase, according to the CME FedWatch tool. Before the Consumer Price Index print was released on Tuesday, Fed Governor Christopher Waller said the central bank should consider raising borrowing costs by 50 basis points if October inflation worsened.
A tamer approach risks hurting the Fed's inflation-fighting credibility, he said.
“While a December rate hike now appears almost fully priced in, the bigger concern is that investors may have underestimated how much further the Fed will need to tighten,” said Daniela Hathorn, senior market analyst at Capital.com.
Nvidia rebounds
Shares of Nvidia jumped 4% premarket after shedding about $480 billion of their value over the last two sessions as questions about CEO Jensen Huang's relationship with a Chinese businesswoman alleged to be a spy for Beijing intensified.
“Right now, this is the mother of all tech CEO scandals because Jensen is bigger than Elvis for tech investors,” said Schiffer, whose firm is an Nvidia shareholder. “But he has tremendous goodwill, which will help insulate him from a situation that might have caused another CEO to burn to ashes.”
Other chipmakers also roared back, with Marvell Technology and Micron up nearly 7% each.
Investors digested the terms set by Anthropic on Tuesday for its blockbuster initial public offering. The Claude chatbot creator is aiming for a valuation of up to $1.4 trillion in the share sale. The US bond market was shut on Wednesday for the Veterans Day holiday.