U.S. stock futures point to a higher open Thursday, as investors look to extend gains from the past few sessions.
Positive sentiment around artificial intelligence is helping tech stocks maintain strength. Nasdaq 100 futures rose 0.6% ahead of the open, reflecting investor enthusiasm.
Leading AI companies are showing notable pre-market moves. Nvidia (NASDAQ:NVDA) climbed 1.4%, while Advanced Micro Devices (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO) jumped 3.2% and 3.5%, respectively.
The surge follows reports that OpenAI’s recent share sale values the company at $500 billion. By selling around $6.6 billion in stock, current and former employees helped the ChatGPT owner surpass SpaceX as the world’s most valuable private company.
“Reports suggest there was appetite for nearly twice as many as the actual number of shares on offer,” said Russ Mould, investment director at AJ Bell.
Investors are also largely ignoring the ongoing U.S. government shutdown, which has delayed releases of weekly jobless claims and factory orders.
Stocks initially fell on Wednesday but recovered strongly over the trading session. The major indexes climbed from session lows to end in positive territory.
The Nasdaq rose 95.15 points, or 0.4%, to 22,755.16, the S&P 500 gained 22.74 points, or 0.3%, to 6,711.20, and the Dow added 43.21 points, or 0.1%, to 46,441.10.
This marked the fourth consecutive session of gains, with the Dow and S&P 500 hitting new record closing highs.
The early pullback followed the U.S. government shutdown after Congress failed to approve a temporary spending bill.
Democrats insist that any stop-gap funding include extended Obamacare tax credits, while Republicans argue this should be debated after the bill is passed.
Some of the early pressure was offset by optimism about interest rate prospects after private-sector employment data were released.
ADP reported a surprising decline of 32,000 jobs in September, with August revised down to a 3,000-job loss. Economists had forecast a gain of 50,000 jobs, contrasting with the initial 54,000 added in August.
Bill Adams, Chief Economist at Comerica Bank, noted, “The ADP report could have outsize influence on the Federal Reserve’s next interest rate decision if the shutdown lasts long enough to keep the Fed from seeing the September jobs report before their next meeting later this month.”
Analysts also pointed out that past government shutdowns have historically had limited impact on markets.
“On average, the S&P 500 has historically been about flat during shutdowns, with a slightly higher probability of gains vs. losses since 1976,” said Jeff Buchbinder, Chief Equity Strategist for LPL Financial.
He added, “Considering that most of the losses came during the late 1970s, and the biggest decline during a shutdown since 1980 was 2.2%, history suggests stocks have a good chance of going higher during this shutdown, though past performance does not guarantee future results.”
Pharmaceuticals extended their previous session rally, pushing the NYSE Arca Pharmaceutical Index up 5.4% to its strongest close in almost seven months.
Computer hardware stocks followed suit, with the NYSE Arca Computer Hardware Index spiking 3.9% to a record closing high.
Biotech shares surged as well, with the NYSE Arca Biotechnology Index up 3.2% to a record close amid widespread strength in the sector.
Healthcare, semiconductor, and steel stocks gained steadily, while airlines and financials saw notable declines.
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