Chip rally lifts Nasdaq futures, Dow slips in premarket as markets brace for PPI print

US stock futures traded mixed on Wednesday, but the tone tilted positive for tech as chip stocks staged a sharp premarket rebound, even as investors braced for fresh inflation data and tracked high-stakes geopolitical developments.

Futures tied to the S&P 500 rose 0.2%, while Nasdaq-100 contracts jumped 0.7%, led by strength in semiconductor names. In contrast, Dow Jones Industrial Average futures slipped 0.3%, down 124 points, reflecting broader market caution.

Chipmakers drove early momentum. Nvidia gained over 2% in premarket trading, while AMD rose nearly 2% and Micron Technology surged more than 5%. The broader semiconductor basket also advanced, underscoring continued investor appetite for AI-linked plays despite recent volatility.

The rebound follows a weak Tuesday session, where equities, particularly chip stocks, pulled back after hotter-than-expected consumer inflation data rattled sentiment. That print reinforced expectations that the Federal Reserve is unlikely to cut rates anytime soon.

Now, all eyes are on April’s producer price index (PPI) data due later in the day. Economists expect wholesale inflation to rise 0.5% month-on-month, with core PPI seen at 0.4%. The reading will be closely watched to validate whether rising fuel costs are feeding broader price pressures across the economy.

Beyond macro data, geopolitics remains firmly in focus. US President Donald Trump is in China for a high-profile summit with President Xi Jinping, where trade and artificial intelligence are expected to dominate discussions. Notably, Nvidia CEO Jensen Huang joined the delegation at the last minute, alongside top executives like Tesla’s Elon Musk and Apple’s Tim Cook — a move that has rekindled interest in AI stocks.

However, the broader backdrop remains fragile. Uncertainty around potential US-Iran talks continues to weigh on sentiment, with Trump reiterating military threats even as a tentative ceasefire holds. China’s role as Iran’s largest oil buyer adds another layer of complexity to the negotiations.

Meanwhile, global cues were mixed. Asia-Pacific markets closed on an uneven note, with gains in Japan, South Korea, China, and India offset by weakness in Australia. Oil prices also edged lower, extending recent losses amid geopolitical crosscurrents.

On the corporate front, earnings season rolls on with Cisco, Alibaba, and Birkenstock set to report later today. Alibaba shares were volatile in premarket trading after its results, initially falling on elevated AI spending before trimming losses.

Despite near-term jitters, the artificial intelligence trade continues to dominate market leadership. Analysts say the next leg of the rally may broaden beyond core tech, with sectors linked to energy infrastructure and capital expenditure emerging as potential beneficiaries of sustained AI-driven demand.