U.S. equity futures traded higher on Thursday morning, with the Nasdaq set to build on the record close it achieved in the previous session as investors continued to favor technology shares.
Much of the positive sentiment centered on Cisco Systems (NASDAQ:CSCO), whose quarterly earnings report sparked another wave of buying across the tech sector.
Cisco shares surged 14.5% in premarket activity after the company posted fiscal third-quarter revenue and earnings above analyst expectations while issuing stronger forward guidance. The company also disclosed plans to eliminate nearly 4,000 jobs as part of its restructuring efforts.
Nvidia Advances Following China Chip Approval Report
Nvidia (NASDAQ:NVDA) also moved sharply higher before the opening bell after Reuters reported that the U.S. government had approved sales of Nvidia’s H200 AI chip to roughly 10 Chinese firms.
The report surfaced as Donald Trump and Chinese President Xi Jinping continued their closely watched summit in Beijing.
After nearly two hours of discussions at the Great Hall of the People, Trump described the meeting as “great.”
According to the White House, “The two sides agreed that the Strait of Hormuz must remain open to support the free flow of energy.”
China’s foreign ministry separately stated that both leaders agreed to pursue a “constructive strategic stable relationship” as the guiding framework for bilateral ties over the coming years.
Nasdaq and S&P 500 Set Fresh Records
Wednesday’s session saw strong gains in technology names push the Nasdaq to another all-time closing high.
The S&P 500 also ended at a record level, while the Dow Jones Industrial Average finished marginally lower after earlier gains.
The Dow slipped 67.36 points, or 0.1%, to 49,693.20. The S&P 500 added 43.29 points, or 0.6%, to close at 7,444.25, while the Nasdaq climbed 314.14 points, or 1.2%, ending at 26,402.34.
Chipmakers Continue to Drive Market Leadership
Semiconductor companies remained among the market’s strongest performers, helping lift the Philadelphia Semiconductor Index by 2.6%.
Nvidia (NASDAQ:NVDA) helped lead the sector higher after CEO Jensen Huang joined Trump’s delegation to China shortly before the trip began.
Salesforce and Other Blue Chips Weigh on the Dow
The Dow underperformed broader markets partly because of weakness in Salesforce (NYSE:CRM), whose shares fell 3.2%.
Additional declines in IBM (NYSE:IBM), Home Depot (NYSE:HD) and Visa (NYSE:V) also pressured the index.
Hotter Producer Inflation Adds to Market Concerns
Investors also digested fresh inflation data from the U.S. Labor Department showing a much stronger-than-expected rise in producer prices during April.
The producer price index for final demand climbed 1.4% during the month following an upwardly revised 0.7% gain in March. Economists had forecast a 0.5% increase.
The reading represented the largest monthly increase since March 2022, when producer prices jumped 1.7%.
Annual producer inflation accelerated to 6.0% from 4.3% in March, surpassing expectations for 4.9% growth and marking the strongest yearly increase since late 2022.
Economists See Inflation Pressures Persisting
“The jump in input prices portends further increases for consumer prices in May,” said Ben Ayers of Nationwide. “We expect annual CPI inflation to move above 4.0 percent in May with energy prices still highly elevated more than two months into the Iranian conflict.”
He added, “With inflation still trending higher, we expect the hawkish wing of the FOMC to advocate for an extended pause in interest rates even with incoming Fed Chair Kevin Warsh likely to prefer to lower rates over time.”
Rate-Sensitive Sectors Retreat
Following the inflation release, sectors closely tied to interest-rate expectations — including utilities and housing-related stocks — came under pressure during Wednesday’s trading session.
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