US stock futures steady after losses as inflation fears offset Nvidia boost

Investing.com-- U.S. stock index futures steadied in evening deals on Thursday, and were nursing steep losses from the session as fears of sticky inflation and high interest rates offset cheer over positive earnings from market darling Nvidia.

NVIDIA Corporation (NASDAQ:NVDA) surged to record highs on the back of a bumper first-quarter earnings report. But the stock was also seen running out of steam in aftermarket trade on Friday. 

S&P 500 Futures rose 0.1% to 5,288.75 points, while Nasdaq 100 Futures steadied at 18,704.25 points by 19:47 ET (23:47 GMT). Dow Jones Futures were flat at 39,152.0 points. 

Nvidia rally pauses after bumper earnings 

Nvidia fell 0.3% in aftermarket trade after surging to a record high of $1,063.0 during Thursday’s session. 

The market darling clocked stronger-than-expected first-quarter earnings, while it also presented a robust second-quarter outlook and announced a 10-for-one stock split. 

While gains in Nvidia had initially spilled over into broader technology stocks- on hopes that demand for artificial intelligence will help buoy the sector- this notion was largely offset by fears of high for longer U.S. interest rates, especially following hawkish signals from the Federal Reserve. 

Still, gains in Nvidia- which is the third-largest company on Wall Street- helped reduce overall losses in benchmark stock indexes. 

Wall Street battered by inflation, rate jitters

But broad-based losses saw Wall Street indexes end largely lower on Thursday, after signals from the Fed showed that policymakers were growing increasingly concerned over sticky inflation, which in turn was likely to delay any potential rate cuts this year. 

The S&P 500 fell 0.7% to  5,267.84 points, while the NASDAQ Composite fell 0.4% to 16,736.03 points. The Dow Jones Industrial Average- which has much lower tech weightage than its peers- was by far the worst performer, sinking 1.5% to 39,065.26 points. 

The minutes of the Fed’s late-April meeting, coupled with hawkish comments from several individual Fed officials, showed the central bank saw even slower progress towards inflation reaching its 2% annual target. 

This saw traders largely price out expectations of rate cuts this year. The CME Fedwatch tool showed traders pricing in a nearly equal probability- around 46%- that the Fed will either hold or cut rates in September. 

Thursday’s losses put the S&P and the Dow on course for weekly losses, while the Nasdaq sharply trimmed its gains for the week. All three indexes had hit record highs earlier this week, which also left them open to a heavy bout of profit-taking.