US pre-open: Futures pull back as Nvidia results underwhelm

(Sharecast News) - US stock markets were expected to retreat slightly on Thursday following strong gains the previous session, as markets gave Nvidia's blockbuster first-quarter earnings report a lukewarm reaction.

Reporting its results after the closing bell on Wednesday, chip giant Nvidia smashed earnings and revenue expectations, powered by continuing demand from AI data centres, beat estimates with its forward guidance, raised its dividend by 25 times and added a whopping $80bn to its share buyback plan.

Shares, however, were down in aftermarket trade, while futures suggest a tepid start to the day for Wall Street's largest constituent. Chip peers Intel, AMD and Broadcom were all trading lower ahead of the opening bell.

Futures on the Dow and S&P 500 were pointing to falls of 0.2% in pre-market activity, while Nasdaq futures were down 0.4%.

Stocks rose strongly on Wednesday after Donald Trump suggested that peace talks with Tehran were in the final stages, sending Brent crude prices down 5%. Bond yields also fell sharply after the 10-year yield hit a 16-month high the previous session.

Investors were also digesting the news that Elon Musk's SpaceX is set to debut on the New York Stock Exchange some time next month, with the aerospace and AI company potentially valued at $1.75trn.

"This could be a blockbuster summer for IPOs with OpenAI also expected to list in the coming weeks. Thus, we could get two mega cap IPOs within weeks of each other. How the market absorbs these new listings will be crucial for the future of the AI trade, as both companies are at the heart of the AI revolution," said Kathleen Brooks, research director at XTB.

Things were also looking busy on the economic data calendar, with a barrage of US economic indicators due out over the coming hours, including: building permits and housing starts, jobless claims, the Philly Fed and Kansas Fed manufacturing surveys and the S&P Global PMIs.