Wall St set to open higher as chip stocks rally ahead of Nvidia results

By Ragini Mathur and Utkarsh Hathi

May 20 (Reuters) – Wall Street was poised to open higher on Wednesday, led by a rebound in chip stocks ahead of Nvidia’s quarterly earnings, which investors view as a crucial test of AI demand amid concerns about elevated Treasury yields.

Nvidia, the world’s most valuable company and the centerpiece of the global AI boom, rose 1.7% in premarket trading ahead of its quarterly results, which are expected after the closing bell.

Investors will crunch the numbers for signs that appetite for AI infrastructure remains strong enough to support lofty valuations across the technology and AI space.

“There’s a lot riding as ever on Nvidia. It always gets the top billing whenever it rolls around and certainly is the last big event of the season,” said Chris Beauchamp, chief market analyst, IG Group. 

“It does feel like this is still a market that very much wants to rally … we’ll just have to see whether Nvidia can keep stoking the fuel for the fire and keep the party going.”

The broader chip sector also advanced on Wednesday, helping drive gains across equity futures. Marvell Technology rose 4.7%, Intel gained 4.8% and Micron Technology added 3.4%, while the iShares Semiconductor ETF climbed 2.2%.

At 8:27 a.m. ET, Dow E-minis were up 184 points, or 0.37%, and S&P 500 E-minis were up 30.5 points, or 0.41%. Nasdaq 100 E-minis were up 215.5 points, or 0.75%.

U.S. stocks have come under pressure in recent days as a selloff in global bond markets drove yields higher.

The benchmark 10-year Treasury yield, which touched a 16-month high of 4.687% in the previous session, eased to 4.635% on Wednesday. [US/]

Traders have ramped up bets the U.S. Federal Reserve could raise interest rates at the turn of the year as the conflict in the Middle East pushes oil prices higher, reviving inflation worries.

Brent crude futures slipped about 2% to $109.14 a barrel after U.S. President Donald Trump again said the war with Iran would end “very quickly.” Still, investors remained cautious over the outcome of peace talks as disruptions to Middle Eastern supply continued. [O/R]

Investors are also awaiting the minutes from the Fed’s latest meeting – scheduled to be released later in the day – for clues on policymakers’ thinking, as expectations for a rate hike continue to grow.

Markets are now pricing in a more than 40% chance of a 25-basis-point rate hike in December, according to CME’s FedWatch tool. Expectations for a 50-basis-point increase that month have risen to 13.7%, from 4.2% a week earlier.

Among other movers, TJX gained 3.5% after the off-price retailer raised its annual comparable sales and profit forecasts, banking on resilient demand at its stores.

Retailer Target was up 1.5% after doubling its annual sales growth forecast, while home improvement firm Lowe’s dipped 2% as the company reaffirmed its full-year forecast.

(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by Pooja Desai and Maju Samuel)