U.S. stock index futures showed little movement early Thursday, with contracts for the S&P 500 and Nasdaq hovering near their all-time highs following a two-day surge fueled by artificial intelligence stocks and a sharp decline in oil prices. Dow, S&P 500, and Nasdaq 100 futures each traded within 0.1% of unchanged in premarket action, signaling a pause after Wednesday's record closes.
On Wednesday, the S&P 500 and Nasdaq both closed at new records, driven by strength in semiconductor names. The Dow Jones Industrial Average climbed 1.24% to finish at 49,910.59, just shy of the psychologically important 50,000 mark. The rally has been underpinned by robust earnings from AI-related companies and a drop in energy costs that is helping to ease inflation concerns.
Oil Prices Slide on U.S.-Iran Deal Hopes
Oil prices continued their decline for a second straight session as reports emerged that the United States and Iran are edging closer to a limited agreement to ease hostilities. Brent crude traded near $98 a barrel early Thursday, having fallen sharply in recent days. According to Reuters, the talks are focused on a short-term truce that could relieve some pressure on crude flows through the Strait of Hormuz, though major issues remain unresolved. “The contents of the U.S.-Iran peace proposals are thin,” said Takamasa Ikeda, senior portfolio manager at GCI Asset Management, as cited by Reuters. Tehran has not yet commented on the proposals, and the deal reportedly defers thornier issues such as Iran's nuclear ambitions and unrestricted shipping to future negotiations.
Cheaper oil typically supports stock markets by reducing inflationary pressures and boosting consumer spending power. However, analysts caution that the outlook remains uncertain until a formal agreement is reached.
Labor Data in Focus
Investors are turning their attention to the labor market, with weekly jobless claims due at 8:30 a.m. ET. The main event, however, is Friday's nonfarm payrolls report, which is seen as a key test for the Federal Reserve. The ADP report released earlier this week showed 109,000 new private-sector jobs in April, the largest increase since January 2025. Economists polled by Reuters expect Friday's official report to show just 62,000 new jobs, with the unemployment rate pegged at 4.3%. Elizabeth Renter, senior economist at NerdWallet, described the labor market as “solid but precarious,” according to Reuters.
The Federal Reserve remains a central focus for markets. Traders are now pricing in steady interest rates through the end of the year, reversing earlier expectations of multiple cuts, Reuters reported. “Bad news on the labor side” would be needed to justify a cut, said Vail Hartman, U.S. rates strategist at BMO Capital Markets.
Earnings Season Still Strong
Corporate earnings continue to provide support. S&P 500 companies are on track for first-quarter profit growth of 28.2% year-over-year, based on LSEG data compiled by Reuters. Deutsche Bank chief U.S. equity strategist Binky Chadha called it the “strongest in two decades” for earnings growth, excluding special items.
Chipmakers have been at the forefront of the rally. Advanced Micro Devices surged nearly 19% on Wednesday after projecting stronger-than-expected quarterly revenue. Intel added 4.5%, and the PHLX semiconductor index rose by the same amount, extending its 2026 gain to 62%. Nvidia advanced 5.7% after Corning announced a partnership to boost U.S. production of optical connectivity gear for AI data centers.
Premarket Movers
In premarket trading, action was mixed. Snap shares slipped after the company flagged weak first-quarter ad revenue, citing fallout from the Middle East conflict and sluggish momentum in North America. Whirlpool also lost ground following a miss on first-quarter sales and a suspended dividend. Arm Holdings dropped despite a strong revenue outlook, as investors worried about supply for its new AI chip.
DoorDash shares climbed before the bell after the delivery firm projected robust total order value for the second quarter. Competitor Uber had also issued a bullish bookings outlook recently, crediting its delivery segment. Morningstar’s Mark Giarelli noted that the expected drag from high gas prices on consumers “hasn’t materialized” in company results, according to Reuters.
Market Risks and Valuations
Despite the positive momentum, risks remain. The rally's sustainability depends on oil prices staying low and AI profits broadening beyond the usual megacap names. Valuations are elevated, with the S&P 500 trading at 21.2 times projected earnings for the next year, well above its historical average of 16, per LSEG Datastream data cited by Reuters.
Thursday's session kicks off with jobless claims data, while traders continue to monitor developments from Iran and whether AI leaders can hold onto their recent gains. The market appears quiet ahead of the open, but potential catalysts are lined up.
