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U.S. stock-index futures took a step back on Friday, easing after a powerful rally sparked by results from chipmaker Nvidia that stoked enthusiasm about a possible artificial-intelligence revolution.

What’s happening

  • Dow Jones Industrial Average futures
    fell 5 points, or 0%, to 39118.

  • S&P 500 futures
    dropped 2 points, or 0%, to 5096.

  • Nasdaq-100 futures
    decreased 27 points, or 0.2%, to 18021.

On Thursday, the Dow Jones Industrial Average
rose 457 points, or 1.18%, to 39069, the S&P 500
increased 105 points, or 2.11%, to 5087, and the Nasdaq Composite
gained 461 points, or 2.96%, to 16042.

The S&P 500 registered its 12th record finish of the year, as the Nasdaq Composite finished only 0.1% away from a new record.

Even beleaguered small-caps rose, with the Russell 2000
rising 1%.

What’s driving markets

will still be in the spotlight on Friday after the company’s stock price surged by 16% on Thursday in the wake of its revenue for the fourth quarter, and sales outlook for the first quarter, handily beating analyst expectations. Nvidia’s surge left it as the third most valuable stock in the S&P 500, now ahead of both Alphabet

Investors heeded Nvidia CEO Jensen Huang’s proclamation that AI had “hit the tipping point.”

“We think generative AI will prove to be the growth theme of the decade, and Nvidia’s earnings report demonstrates the current strength of AI infrastructure spending,” said Mark Haefele, chief investment officer of UBS Global Wealth Management.

Federal Reserve Gov. Lisa Cook, in a speech delivered after the stock market had closed on Thursday, said it will take time for AI to impact productivity. “History shows that the journey from invention of general-purpose technologies to innovation to productivity can be long and uneven. Although adoption of generative AI is happening at a rapid clip, the full benefit of a technology requires complementary investments as well as changes in corporate structure, management practices, and worker training,” she said.

Cook said current monetary policy is restrictive but said she wanted greater confidence inflation is converging to 2% before cutting interest rates.

Fed Gov. Christopher Waller made a similar point, in an address Thursday that also was delivered after the stock market had closed. “I still expect it will be appropriate sometime this year to begin easing monetary policy, but the start of policy easing and number of rate cuts will depend on the incoming data,” said Waller.

There are more earnings reports on the docket, including from Warner Bros. Discovery
and Icahn Enterprises
Intuitive Machines’ stock
rallied in premarket trade after the company’s Odysseus spacecraft reached the moon, and started sending signals back to Earth.

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