Nasdaq Hits New Highs as Semiconductor Stocks Surge on AI Frenzy

U.S. stock futures climbed higher late Wednesday as semiconductor stocks rallied on AI-driven tech gains, pushing the S&P 500 and Nasdaq to fresh record highs despite a hot inflation report.

The April producer prices rose 1.4% from the previous month, marking the biggest jump since March 2022, while annual wholesale inflation rose to 6%. Both the S&P 500 and Nasdaq Composite notched fresh intraday and closing record highs on Wednesday as traders bet that AI-driven spending would remain resilient even in a tougher macro environment.

Semiconductor stocks led the rally after Nvidia shares rose over 2% and Micron gained 5%, with the VanEck Semiconductor ETF also jumping 2%. The tech rally gained further momentum after Nvidia CEO Jensen Huang joined U.S. President Donald Trump during his Beijing trip to meet Chinese President Xi Jinping, boosting hopes that tensions over AI chip exports to China could eventually ease.

Cisco Systems shares surged 20% in extended trading after issuing stronger-than-expected quarterly guidance and announcing 4,000 job cuts to redirect spending towards AI and networking investments. Intuitive Machines selection for the U.S. Space Force's Andromeda contract also contributed to its 11% gain on Wednesday.