Lisa Pauline Mattakal and Ankika Biswas
(Reuters) – U.S. stock index futures were little changed on Friday as large-cap technology and chip stocks lost ground and investors awaited reviews of the manufacturing and services sectors for more information on the health of the world’s largest economy. .
It broke above 5,500 during Thursday’s session, but both the benchmark index and the tech-heavy Nasdaq closed lower as large-cap stocks pulled back.
Shares of artificial intelligence chip maker Nvidia (NASDAQ:) fell 1.4% in premarket trading on Friday after losses in the previous session sent its market value back below that of Microsoft (NASDAQ:).
Shares of semiconductor companies Qualcomm (NASDAQ:), Micron Technology (NASDAQ:) and Hand Holdings (NASDAQ:) fell 1% to 2%, while mega-cap stocks like Microsoft and Meta Platforms (NASDAQ:) were down about 0.3% each.
Wall Street’s incredible rally after the tail end of 2023 was primarily driven by stocks like Nvidia and a number of other highly valued artificial intelligence stocks. Analysts, however, noted that the steady rise in their estimates is sustainable.
Investors are also weighing a slew of worsening economic data and comments from US Federal Reserve officials that interest rates could remain high for a long time unless there is a consistent improvement in inflation readings.
Later in the day, the focus will be on near-term S&P PMI readings, which are expected to ease slightly but remain above the 50 level, indicating activity is still picking up.
“Any unexpected slowdown in the US economy could cause some concern… but investors will be hoping to see an easing in price pressures, which will be positive for risk sentiment,” said Raffi Boyajian, lead investment analyst at forex broker XM.
Friday’s session will also mark the expiration of quarterly derivatives contracts tied to stocks, index options and futures, also known as the “triple whammy.”
“With Wall Street hit by profit-taking after a near-continuous rally in June, there is a risk of some further volatility on Friday due to the triple whammy,” Boyajian said.
All three major Wall Street stock indexes will close the week higher, as will the small-cap indexes.
Money markets are pricing in a 58% chance of a 25 basis point rate cut at the Fed’s September meeting and are still expecting about two rate cuts this year, according to LSEG FedWatch data.
At 7:29 a.m. ET, they were up 7 points, or 0.02%, down 1.75 points, or 0.03%, and up 2.25 points, or 0.01%.
Spirit AeroSystems (NYSE:) shares jumped 4.2% after a Reuters report that Boeing (NYSE:) is close to a deal to buy out the aircraft parts supplier after months of negotiations.
Shares of drugmaker Gilead (NASDAQ:) jumped 2.9%, extending gains from Thursday, as a late-stage study showed its long-acting injectable drug was more effective at preventing HIV infection in women than the existing daily pill Truvada. .
Sarepta Shares of Therapeutics (NASDAQ:) jumped 37.1% after the U.S. Food and Drug Administration approved expanding the use of the company’s gene therapy to patients with Duchenne muscular dystrophy aged four years and older.