Wall St Set For Higher Open As Nvidia Outweighs Fed Jitters

U.S. stocks were set for a higher open on Thursday as a strong sales forecast from Nvidia boosted chipmakers, although a surprise fall in weekly jobless claims added to worries that the Federal Reserve will keep raising interest rates for longer.

Nvidia Corp surged 12.3% in premarket trading after the chip designer forecast quarterly sales above estimates and reported a surge in the use of its chips to power artificial intelligence services, such as chatbots.

Shares of Broadcom Inc, Qualcomm Inc, Intel Corp and Advanced Micro Devices Inc rose between 1.2% and 4.9%.

Futures cut some gains after data showed the number of Americans filing new claims for unemployment benefits unexpectedly fell last week.

"Markets are tracking the earnings reports overnight from Nvidia," said Robert Pavlik, senior portfolio manager at Dakota Wealth.

"Investors aren't drawing too much attention to the economic data we've had and you've got a little bit of a pop in a very popular stock like Nvidia."

A separate report confirmed that the economy grew solidly in the fourth quarter, though much of the increase in output came from unsold goods at businesses.

Gross domestic product increased at a revised 2.7% annualized rate last quarter, the government said in its second estimate of fourth-quarter GDP. Economists were forecasting a 2.9% rise.

At 8:50 a.m. ET, Dow e-minis were up 39 points, or 0.12%, S&P 500 e-minis were up 15 points, or 0.38%, and Nasdaq 100 e-minis were up 106.25 points, or 0.88%.

The benchmark S&P 500 closed lower for a fourth session on Wednesday after minutes from the Fed's meeting showed nearly all policymakers supported more rate hikes but agreed that the shift to smaller-sized hikes would let them calibrate better with incoming data.

After a strong January, stock markets have entered a volatile patch as the Fed's struggle to bring inflation within its 2% target, a resilient economy and hawkish commentary by central bank officials have fanned concerns about further rate hikes.

Those concerns will be at the back of traders' minds as they assess remarks from Atlanta Fed President Raphael Bostic and San Francisco Fed President Mary Daly later in the day.

Analysts polled by Reuters predict a correction within the next three months even though they expect the S&P 500 to climb 5% by year-end.

Among other stocks, eBay Inc slid 5.5% after warning of dour demand in the first half of 2023 due to strained consumer spending domestically and in Europe.

Moderna Inc fell 4.4% after the vaccine maker reaffirmed its annual sales forecast of $5 billion for its COVID-19 vaccines despite its fourth-quarter sales exceeding estimates.