US stock futures rise as chips rebound ahead of jobs data

U.S. stock index futures rose on Friday as a recovery in chipmakers helped offset worries about renewed U.S.-Iran tensions, while investors looked ahead to crucial employment report.

By 06:56 a.m. ET, Dow E-minis rose 119 points, or 0.24%. S&P 500 E-minis rose 30 points, or 0.41%, and Nasdaq 100 E-minis added 166.5 points, or 0.58%, both trading near record highs.

U.S. stocks closed lower in the previous session as investors hit pause on semiconductor stocks that have rallied sharply this year, benefiting from a spending boom in artificial-intelligence infrastructure.

Chip stocks steadied on Friday, with Microchip Technology rising 3.1% in premarket trading after forecasting first-quarter revenue above estimates, driven by strong demand for its chips used in the industrial and automotive sectors.

Qualcomm leapt 4.8%, while Nvidia rose 0.8%.

The gains helped overshadow concerns in global markets as U.S. and Iranian forces clashed in the Gulf, denting hopes of a swift resolution to the Middle East conflict and a gradual reopening of the Strait of Hormuz, a key transit route for oil and liquefied natural gas.

Oil prices topped $100 a barrel. [O/R]

"The clock is ticking, as we need to see oil flows resuming sooner rather than later," Barclays strategist Emmanuel Cau said in a note. 

"The semis trade is arguably starting to look extended, so wider market breadth and a continued melt-up in equities are contingent on tangible progress regarding the reopening of the Strait of Hormuz."

Despite concerns that oil prices were fueling inflation, the S&P 500 and Nasdaq have touched record highs, helped by a strong earnings season, signs of a resilient economy and optimism around the outlook for technology and AI companies. 

JOBS TEST

The Labor Department's closely watched employment report, scheduled for release at 8:30 a.m. ET, is expected to show nonfarm payrolls increased by 62,000 jobs last month after rebounding 178,000 in March, according to a Reuters poll of economists.

The unemployment rate is seen holding steady at 4.3%, pointing to labor market stability as indicated by recent economic data.

"With inflationary concerns running high, a strong print could move expectations for rate cuts further out yet," said Derren Nathan, head of equity research at Hargreaves Lansdown.

Money market futures imply traders expect the U.S. Federal Reserve to hold interest rates steady in the 3.50% to 3.75% range until the end of the year.

In other movers, Cloudflare shares plunged 17.5% after the cloud services company said it would cut about 20% of its workforce and forecast second-quarter revenue slightly below Wall Street expectations.

Trade Desk fell 13% after the ad-tech firm forecast second-quarter revenue below Wall Street estimates.

CoreWeave dropped 6.2% after the cloud infrastructure technology company raised the lower end of its annual capital expenditure forecast, citing a rise in component costs.

Online travel platform Expedia slipped 7.6% after it flagged that the Middle East conflict is weighing on demand. 

(Reporting by Sruthi Shankar and Utkarsh Hathi in Bengaluru; Editing by Pooja Desai)