In premarket trading, Nvidia's shares rose by 2.2%, a more modest increase compared to previous post-earnings rallies, as the company reported a further slowdown in revenue growth and projected first-quarter gross margins slightly below market expectations.
Dan Coatsworth, an investment analyst at AJ Bell, noted, "It is significant that Nvidia has surpassed earnings expectations for the ninth consecutive quarter yet has not managed to impress the market."
Other semiconductor companies also saw gains, with Broadcom increasing by 2.3% and Advanced Micro Devices rising by 1.6%.
Major tech firms Microsoft and Meta, which are among Nvidia's largest clients, saw their stocks rise by 0.4% and 1.7%, respectively, recovering from earlier losses this month.
The introduction of affordable AI models by China's DeepSeek in January has dampened a two-year tech-driven bull market on Wall Street, leading to Nvidia's staggering loss of half a trillion dollars in market value in just one day. Additionally, a recent analyst report indicating that Microsoft might be terminating some data center leases has sparked concerns about potential overcapacity.
Coatsworth remarked, "The ability to deliver AI services at a lower cost, combined with increasing uncertainties regarding the economic landscape, suggests that companies will be more cautious with their tech-related expenditures."
As of 07:12 a.m. ET, Dow E-minis were up 140 points, or 0.32%, S&P 500 E-minis increased by 39.25 points, or 0.66%, and Nasdaq 100 E-minis rose by 170.5 points, or 0.8%.
Despite these gains, all three major U.S. indexes were on course for monthly declines, influenced by the Trump administration's trade policies and indications of slowing economic growth, which have heightened risk aversion among investors.
In his latest trade remarks, U.S. President Donald Trump proposed a 25% "reciprocal" tariff on European automobiles and other products.
He created uncertainty regarding the timeline for Mexican and Canadian tariffs by stating they could be implemented on April 2, while a White House representative clarified that the earlier deadline of March 4 was still in place.
On the economic front, the second estimates for quarterly gross domestic product and the weekly jobless claims report are scheduled for release at 8:30 a.m. ET.
The Monthly Personal Consumption Expenditure data, which is the Federal Reserve's preferred measure of inflation, will be released on Friday and is expected to influence the outlook for potential monetary policy easing this year.
Data from LSEG indicates that traders anticipate the central bank will reduce borrowing costs by at least 50 basis points by December.
Statements from policymakers, including Thomas Barkin, Jeffrey Schmid, Fed Vice Chair for Supervision Michael Barr, and Governor Michelle Bowman, are likely to reinforce the central bank's cautious approach toward further interest rate reductions.
Salesforce, a Dow component, projected fiscal 2026 revenue below market expectations, resulting in a 3.1% decline in the company's shares.
In contrast, Snowflake's shares surged by 12.3% after the data analytics firm forecasted fiscal 2026 product revenue exceeding estimates.
Moderna's stock fell by 4.9% following a report indicating that U.S. health officials were reassessing a $590 million contract awarded to the company for the development of its bird flu vaccine.