US stock futures steady as Nvidia rally cools; rate cuts in focus

Investing.com– U.S. stock index futures fell slightly in evening deals on Wednesday as a rally in technology stocks, particularly Nvidia, ran out of steam, while investors fretted over an upcoming interest rate decision from the Federal Reserve. 

Gains in technology helped Wall Street shrug off early losses and end higher on Wednesday, even as a stronger reading on core consumer inflation dented expectations of a bumper interest rate cut by the Fed. 

Tech gains also helped markets look past heightened political uncertainty after a fiery presidential debate between Vice President Kamala Harris and former President Donald Trump, where Harris was seen gaining an edge over Trump. 

fell 0.1% to 5,558.0 points, while fell 0.1% to 19,252.50 points by 20:12 ET (00:12 GMT). steadied at 40,893.0 points. 

Nvidia dips in aftermarket trade, tech rally cools 

NVIDIA Corporation (NASDAQ:)- which was at the heart of Wall Street’s Wednesday rally- fell 0.2% in aftermarket trade, after surging more than 8% during the session.

Gains in the chipmaker were driven largely by positive comments from CEO Jensen Huang, who flagged robust demand for its products, especially its newest line of artificial intelligence chips, called Blackwell.

Gains in Nvidia spilled over into broader technology stocks, on hopes that sustained AI demand will help buoy the sector. But the sector was still nursing a steep selldown from last week.

The rose 1% to 5,554.10 points, while the rose 2.1% to 17,391.16 points on Wednesday. The rose 0.3% to 40,861.71 points.

Strong CPI reading batters bumper rate cut hopes 

A stronger-than-expected reading on inflation saw investors largely scale back bets that the Fed will cut interest rates by 50 basis points in September.

While still eased in August, the stronger core reading spurred some concerns over inflation remaining sticky.

Traders were seen pricing in an 84% chance for a 25 basis point reduction, up from prior expectations of a 66% chance, showed. Chances of a 50 bps point were down to 16% from prior expectations of 34%. 

But the Fed is still expected to cut rates by 25 bps at a , kicking off an easing cycle that could bring more rate cuts later this year. 

Before that, data due later on Thursday is set to offer more cues on U.S. inflation, and will be closely watched, especially after the strong CPI reading.