Futures tracking the Nasdaq 100 and S&P 500 climbed on Wednesday, driven by a positive financial forecast from neocloud firm CoreWeave. Nasdaq 100 E-minis added 527.5 points, or 1.9%, while S&P 500 E-minis gained 0.86%. The rally follows CoreWeave’s announcement that it expects to reach profitability on an adjusted basis by the first half of 2028, a disclosure that helped soothe market worries regarding the scale of AI-related capital expenditure.
Nvidia, which had shed approximately $430 billion in market value over the previous two sessions, saw its shares rise 5.2% in premarket trading. Other semiconductor companies followed suit, with Marvell Technology and Micron shares increasing by 8% and 6.8%, respectively. Market participants are also monitoring Anthropic’s initial public offering, as the developer of the Claude chatbot seeks a valuation of up to $1.4 trillion.
Despite the recovery in tech equities, concerns persist regarding the U.S. Federal Reserve's monetary policy. Data released on Tuesday showed that consumer prices in October rose more than anticipated, fueled by increased costs for food and accommodation. According to the CME FedWatch tool, traders view a December interest rate hike as a certainty, with an 11.5% probability of a half-percentage-point increase.
Fed Governor Christopher Waller previously indicated that the central bank should consider a 50-basis-point increase if inflation data worsened, warning that a cautious approach could threaten the Fed's credibility. The U.S. bond market remained closed on Wednesday due to the Veterans Day holiday.
Key facts
- Nasdaq 100 E-minis rose 527.5 points, or 1.9%, while S&P 500 E-minis climbed 0.86%.
- CoreWeave shares jumped more than 13% in premarket trading following its profitability guidance.
- Nvidia shares rebounded 5.2% after a $430 billion loss over the prior two trading sessions.
- October inflation data showed higher-than-expected increases in food and accommodation costs.
- Traders estimate an 11.5% chance of a 50-basis-point interest rate hike by the Federal Reserve next month.
Why it matters
The market remains caught in a tug-of-war between strong investor appetite for technology stocks and lingering concerns over higher interest rates and potential slower deployment of data centers. While current investments in AI infrastructure are expected by some analysts to drive long-term gains, the broader economic climate—marked by persistent inflation—suggests that the Federal Reserve may need to tighten borrowing costs more than previously anticipated.
Source: Economic Times
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