US STOCKS-Futures subdued after scorching AI-led rally

U.S. stock index futures took a breather on Friday after a stunning rally in the previous session, spurred by upbeat results from AI poster child Nvidia that renewed enthusiasm about artificial intelligence. The S&P 500 and Dow Jones Industrial Average surged to record closing highs on Thursday, while the tech-heavy Nasdaq was a whisker away from its all-time high, as investors piled into technology stocks with the AI-fueled frenzy on Wall Street gaining more steam.

U.S. stock index futures took a breather on Friday after a stunning rally in the previous session, spurred by upbeat results from AI poster child Nvidia that renewed enthusiasm about artificial intelligence.

The S&P 500 and Dow Jones Industrial Average surged to record closing highs on Thursday, while the tech-heavy Nasdaq was a whisker away from its all-time high, as investors piled into technology stocks with the AI-fueled frenzy on Wall Street gaining more steam. Nvidia added $277 billion in stock market value on Thursday, Wall Street's largest one-day gain in history.

Shares of the heavyweight chip designer were up 1.8% in premarket trade on Friday and the company is closing in on $2 trillion in market value for the first time. "Yesterday's rally was exceptional and now the markets are consolidating," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, but added that the AI-fueled momentum is expected to persist this year.

"Yes, the valuations are going high, but earnings are going high as well. So there is something really material and big happening right now as a fundamental support to the technology rally." Corporate earnings have been robust in the fourth quarter, with 78.5% of the 437 companies in the S&P 500 that have reported earnings so far exceeding estimates, compared with the annual 76% average, according to LSEG data on Thursday.

Most megacap stocks were subdued on Friday, with Tesla , Amazon.com and Apple down between 0.3% and 0.9%. At 07:00 a.m. ET, Dow e-minis were up 39 points, or 0.1%, S&P 500 e-minis were up 1.75 points, or 0.03%, and Nasdaq 100 e-minis were down 8.75 points, or 0.05%.

Still, all the three major indexes were set for weekly gains after turbulence in the prior week when hotter-than-expected inflation data dampened expectations of early interest rate cuts from the U.S. Federal Reserve. Traders firmed up bets against any U.S. interest-rate cuts before June after Fed Governor Christopher Waller on Thursday said he was in "no rush" to lower rates.

Among other stocks, Carvana surged 30.7% on reporting its first-ever annual profit, helped by its pact with bondholders to cut its outstanding debt by $1 billion. Super Micro Computer fell 5% after it announced pricing of $1.5 billion convertible senior notes.

Jack Dorsey-led Block jumped 15.4% after the payments firm forecast adjusted core earnings for the current quarter above Wall Street estimates, betting on consumer resilience.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)