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The
S&P 500 crossed the 5,500 point milestone during Thursday's
session, however, both the benchmark index and the Nasdaq closed
lower as shares of megacap stocks pulled back.
Nvidia dropped 1.5% in premarket trading on Friday, after losses
in the previous session saw its market valuation fall back below
that of Microsoft.
Other chipmakers Broadcom, Super Micro Computer and Qualcomm
were down between 0.8% and 1.2%, while Microsoft's shares fell
0.2% and Apple was down 0.3%.
Later in the day, numbers for the manufacturing and services
sectors are expected to fall slightly, but remain above the 50
level that shows activity is still expanding.
Wall Street has rallied in recent months, primarily driven by
the likes of Nvidia and a handful of other stocks linked to
artificial intelligence.
Investors are also assessing a string of weakening economic
data, and commentary from the U.S. Federal Reserve that interest
rates could remain higher for longer if there is no consistent
improvement in inflation data.
Minneapolis Fed President Neel Kashkari said on Thursday it
would take a year or two to get inflation back to 2%, as wage
growth might still be too high.
Still, all three major Wall Street indexes are on track to close
the week higher, as is the small-cap focused Russell 2000.
Money markets are pricing in a 64% chance of a 25-basis point
interest rate cut at the Fed's meeting in September, and still
expect about two rate cuts this year, according to LSEG's
FedWatch data.
Friday's session will also mark the expiry of quarterly
derivatives contracts tied to stocks, index options and futures,
also known as "triple witching".
At 5:49 a.m. ET, Dow e-minis were down 26 points, or 0.07%, S&P
500 e-minis were down 8.25 points, or 0.15%, and Nasdaq 100
e-minis were down 24.75 points, or 0.12%.
Drugmaker Gilead's shares jumped 6.4%, extending gains from the
previous session as a late-stage study showed its long-acting
injectable drug was more effective in preventing HIV infection
in women compared to its existing daily pill Truvada.
Sarepta Therapeutics soared 34% after the U.S. Food and Drug
Administration allowed the expanded use of the company's gene
therapy for patients with Duchenne muscular dystrophy aged four
and older.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Shounak
Dasgupta)
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