Wall Street set for gains as Nvidia’s outlook calms AI demand fears

By Johann M Cherian and Sukriti Gupta

(Reuters) – Wall Street’s main indexes looked set for a higher open on Thursday as AI bellwether Nvidia’s upbeat forecast soothed concerns of cooling demand in the industry, though a jump in weekly jobless claims kept a check on gains.

Nvidia advanced 1.6% in premarket trading – a move much tamer than some of the stock’s recent post-results surges – as the company’s revenue growth slowed further and it forecast first-quarter gross margin slightly below expectations.

Fellow chipmakers Broadcom added 1.8% and Advanced Micro Devices gained 1%.

Megacaps Microsoft and Meta, among Nvidia’s largest customers, rose 0.3% and 1.2%, respectively, bouncing from declines earlier in the month.

The launch of low-cost AI models from China’s DeepSeek in January cooled a two-year, tech-driven bull run on Wall Street, with Nvidia losing half a trillion dollars in market value in a single day. More recently, an analyst report suggesting Microsoft was scrapping some data center leases also raised concerns of overcapacity.

“A lot of the momentum trade, which holds many of these stocks, has been quite volatile,” said Leslie Thompson, co-founder and chief investment officer at Spectrum Wealth Management.

“So the news coming from Nvidia is bringing confidence around the market in general, and obviously to tech specifically.”

At 08:48 a.m. ET, Dow E-minis were up 24 points, or 0.06%, S&P 500 E-minis were up 23.5 points, or 0.39% and Nasdaq 100 E-minis were up 130.5 points, or 0.62%.

Dampening some risk taking, data showed jobless claims stood at 242,000, higher than estimates of 221,000.

The report comes on the heels of multiple data points over the past week that suggested the economy was stalling, fears of which have also put all three major U.S. indexes on track for monthly declines.

“There has already been a bit of a growth scare in markets after (business activity data) last week came in soft … so this data is going to get a lot of attention,” said Ross Mayfield, investment strategist at Baird.

Separately, a second estimate showed gross domestic product rose by 2.3% in the fourth quarter of 2024 – in line with a previous forecast.

In his latest threats on trade partners, U.S. President Donald Trump floated a 25% “reciprocal” tariff on European cars and other goods.

But he sowed confusion on the timeline of Mexican and Canadian duties after saying they could take effect on April 2, while a White House official said the previous March 4 deadline remained in effect.

Focus will now shift to the monthly Personal Consumption Expenditure data, the Federal Reserve’s preferred inflation gauge, due on Friday.

According to data compiled by LSEG, traders expect the Fed to lower borrowing costs by at least 50 basis points by December.

Comments from policymakers including Thomas Barkin, Jeffrey Schmid, Fed Vice Chair for Supervision Michael Barr and Governor Michelle Bowman are due through the day.

Dow component Salesforce forecast fiscal 2026 revenue below expectations, sending shares of the business software provider down 2.5%.

Snowflake rose 12.6% after the data analytics provider forecast fiscal 2026 product revenue above estimates.

Moderna dropped 3.8% after a report said U.S. health officials were reevaluating a $590 million contract that was awarded to the drugmaker for the development of its bird flu vaccine.

(Reporting by Sukriti Gupta, Medha Singh and Johann M Cherian in Bengaluru; Editing by Devika Syamnath)

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