Wall Street Rally Fueled by Chip Stocks and Economic Optimism

S&P 500 and Nasdaq futures surged on Wednesday, driven by strong performances in key stocks and positive signals from Federal Reserve Chair Jerome Powell. Nvidia and other chip stocks rose, while Tesla's stock gained further traction. Market watchers focus on upcoming U.S. inflation data and the second-quarter earnings season.

The S&P 500 and Nasdaq futures experienced a remarkable surge on Wednesday as heavily weighted stocks continued to buoy Wall Street. This comes as Federal Reserve Chair Jerome Powell's comments and essential inflation data are set to provide more direction this week.

AI-chip leader Nvidia climbed 1.1% in premarket trading, reaching a near three-week high during the previous session. Other chip stocks like Arm Holdings and Micron Technology also saw gains of roughly 1% each. Taiwan Semiconductor Manufacturing Co. – the world's largest contract chipmaker – rose 2% following better-than-expected second-quarter revenue.

Leading the upward momentum, stocks from the so-called "Magnificent Seven," including Meta Platforms, Apple, Alphabet, and Microsoft, all saw increases of about 0.4% each. Tesla edged up 0.5% after HSBC raised its price target. The benchmark S&P 500 closed at a record high for the fifth straight session, while the Nasdaq hit its sixth consecutive record, fueled by optimism around a potential interest rate cut in September.

(With inputs from agencies.)