Futures tied to the S&P 500 and the Nasdaq advanced to new highs on Thursday, supported by a premarket uptick in Nvidia shares and a broader rally among technology stocks. Nvidia rose 1.9% before the bell, pushing the chipmaker's market capitalization to $5.9 trillion after a report that cited sources saying the U.S. has cleared about 10 Chinese firms to buy its H200, the company's second-most powerful artificial intelligence chip.
The steady strength in technology names - and chipmakers in particular - has been a key driver of U.S. equity markets reaching successive record closes in recent sessions, even as investors weigh geopolitical risks and the effect of rising energy prices on inflation.
Market participants were also tracking developments at a two-day U.S.-China summit. At the start of the meeting, Chinese President Xi Jinping told U.S. President Donald Trump that trade discussions were moving forward, while warning that tensions over Taiwan could lead relations down a dangerous path and possibly risk conflict. The summit occurs amid the ongoing war with Iran, and the U.S. president is expected to press Chinese officials for assistance in ending a conflict that has contributed to surging global energy prices.
By 05:46 a.m. ET, futures were higher across major benchmarks - Dow E-minis were up 215 points, or 0.43%; S&P 500 E-minis were up 11.25 points, or 0.15%; and Nasdaq 100 E-minis were up 30.5 points, or 0.1%.
The S&P 500 and the Nasdaq also closed at record highs on Wednesday, extending a recent run led by AI-linked technology shares. Those gains have helped investors look past hotter-than-expected producer prices data earlier in the week.
Recent readings showing stronger consumer and producer price inflation have reinforced expectations that the Federal Reserve will maintain a restrictive monetary policy stance for longer. Traders are now assigning more than a 28% probability of a quarter-point rate hike by year-end, up from 20.7% a week earlier, according to the CME Group's FedWatch Tool.
Attention will turn to April retail sales, due at 8:30 a.m. ET, for evidence that rising gasoline and energy costs might be hitting consumer spending. Weekly initial jobless claims will be released at the same time and are expected to provide additional information on labor market conditions.
Among notable individual movers, Cisco shares jumped 16.5% after the networking company said it would cut nearly 4,000 jobs as part of a restructuring. Cisco also raised its annual revenue forecast following a surge in orders from hyperscalers.
Market context and near-term focus
Investors are balancing strong momentum in AI-related technology stocks with macroeconomic and geopolitical uncertainties. Upcoming U.S. data releases on retail sales and jobless claims will be watched for signs of whether consumers are beginning to pull back in response to higher fuel and energy costs.
At the same time, developments at the high-level diplomacy between Washington and Beijing, and ongoing conflict in the Middle East, remain important variables for market direction given their potential impact on trade and energy prices.