Stock futures edge lower ahead of retail sales, jobs data; Chip stocks extend losses: Live updates

U.S. equity futures turned negative early Thursday following a rally driven by cooler inflation, lower Treasury yields and encouraging earnings reports.

Futures tied to the Dow Jones Industrial Average dipped 0.02%, or 12 points, reversing their earlier advance. S&P 500 futures were down 0.17%. Nasdaq 100 futures were 0.52% lower.

In regular trading, the Dow advanced 150.91 points, or 0.3%, to end the day at 52,659.18. The broad market S&P gained 0.4%, finishing at 7,572.43, and the tech heavy Nasdaq Composite rose 0.6% to 26,269.23.

U.S. tech stocks were set to open in negative territory, after semiconductor stocks in Europe and Asia continued their retreat. Nvidia was down 1.61% in premarket trade, with Advanced Micro down 3.39%, Micron falling 3.39% and Broadcom shedding 1.7%.

After SK Hynix shares plunged 11.5% in Seoul, Switzerland’s ST Microelectronics — Europe’s largest semiconductor manufacturer — shed 3.43%. Dutch chip imprint ASMI dropped 2.77%, and Germany’s Infineon Technologies fell 2.26%.

A softer-than-expected U.S. producer price index added to optimism that inflation is cooling, helping lift equities and providing some comfort to investors that the Federal Reserve will keep key interest rates on hold. Additionally, strong earnings from major financial firms reassured investors that earnings growth remains intact, despite easing inflation, while lower Treasury yields boosted demand for growth stocks, particularly mega-cap technology companies.

Michael Kantrowitz, chief investment strategist and head of portfolio strategy at Piper Sandler, speaking to CNBC’s “Closing Bell: Overtime,” emphasized the importance of rates staying sideways or declining for the market to broaden.

“In order for the market to broaden, I believe full stop that you need rates to either move sideways or decline,” he said. “The best backdrop for the equity market in today’s regime would be employment that stays more or less sluggish because I think that can help keep a lid on interest rates and prevent any rate hikes.”

Across the Atlantic, the pan-European Stoxx 600 was down 0.44% in morning dealmaking, with most regional sectors edging lower and the continent’s major bourses trading in negative territory. In Asia, South Korea’s Kospi closed at over 6.4% lower, while the small-cap Kosdaq fell 4.5%. Japan’s benchmark Nikkei 225 declined 2.8%, and the Topix dropped 1.5%. Mainland China’s CSI 300 lost 1.9%. Australia’s benchmark S&P/ASX 200 ended flat.

On Thursday, investors will be looking to retail sales data and jobless claims at 8:30 a.m. ET for further signs of whether the economy is slowing enough to keep inflation under control without tipping into a meaningful downturn.

Corporate earnings also remains a key driver. UnitedHealth will report its results before the bell and Netflix is scheduled to report its after the bell.