(Reuters) – U.S. stock index futures rose on Thursday, as investors cautiously welcomed tariff talks between the U.S. and Japan on the final trading day of the week, recovering some ground after sharp losses in the previous session.
U.S. President Donald Trump said the country had made “big progress” in talks with Japan, one of the first rounds of face-to-face negotiations since his sweeping imposition of duties on global imports roiled markets and stoked recession fears.
Investors will be closely watching all negotiation talks with dozens of countries over the coming weeks for more clarity on the size and scope of tariffs on individual nations and sectors.
Upbeat results from Taiwan Semiconductor Manufacturing Co (TSMC) also contributed to some recovery for U.S. chip stocks, which had tumbled in the prior session after Nvidia flagged steep costs from new curbs on its AI chip exports to China.
TSMC’s U.S.-listed shares jumped 3.6% in premarket trading, while Nvidia rose 1.3% after falling nearly 7% on Wednesday.
However, highlighting the sector’s challenges, Intel lost 1.8% after a report the company will need a license to sell some of its advanced artificial intelligence chips to China.
At 5:25 a.m. ET, Dow E-minis were up 360 points, or 0.9%, S&P 500 E-minis were up 51.75 points, or 0.98% and Nasdaq 100 E-minis were up 201.75 points, or 1.1%.
The indexes had notched steep declines after Nvidia’s warning on Wednesday.
Their losses deepened after Federal Reserve Chair Jerome Powell also warned that Trump’s tariff policies risked pushing inflation higher while weakening economic growth. Powell said policymakers needed more clarity before adjusting policy.
“With Trump having shown greater tolerance to market turmoil than anticipated and Powell now refusing to throw a lifeline, equities remain vulnerable,” analysts at ING said.
Traders dialed back bets of a May rate cut, now pricing in just a 13.5% chance of a 25 basis point reduction from over 27% a week ago, as per CME’s FedWatch.
Ahead of the long weekend, all three major Wall Street indexes are on track for weekly losses, with the S&P 500 on pace to lose about 1.6%.
Markets have been highly volatile, while last week was S&P’s best week since November 2023, the week before that was its worst since 2020’s pandemic-driven selloff.
Corporate results remain in focus, with Netflix earnings expected after market close.
March housing starts and weekly jobless claims data are also on deck, and Fed board Governor Michael Barr will speak later in the day.
(Reporting by Lisa Mattackal in Bengaluru; Editing by Shinjini Ganguli)
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