Nov 12 (Reuters) - Wall Street futures ticked higher on Wednesday as investors were optimistic of a possible end to the longest U.S. government shutdown, while an upbeat earnings outlook from Advanced Micro Devices revived optimism around the AI trade that has taken a hit recently.
AMD (AMD.O), opens new tab advanced 5.7% in premarket trading after the chip designer said it expects annual data center chip revenue of $100 billion within the next five years, and earnings to more than triple.
U.S. stocks came under pressure early on Tuesday after news that Japanese technology investor SoftBank Group (9984.T), opens new tab had sold its stake in Nvidia (NVDA.O), opens new tab and a forecast cut from AI cloud services provider CoreWeave (CRWV.O), opens new tab raised concerns about rapidly growing valuations among tech companies.
However, the indexes cut losses as the session wore on and the blue-chip Dow (.DJI), opens new tab closed at a record high.
At 7:10 a.m. ET, Dow E-minis were up 88 points, or 0.18%, S&P 500 E-minis were up 19.25 points, or 0.28% and Nasdaq 100 E-minis were up 128.5 points, or 0.50%.
Members of the House of Representatives headed back to Washington on Tuesday after a recess for a vote that could reopen the government and restore stability to air travel and food subsidies.
The vote is due to take place on Wednesday afternoon on a compromise that would restore funding to government agencies, with President Donald Trump expected to sign it into law.
The 42-day long closure has weighed on the economy. In the absence of government-collected data, both the Federal Reserve and traders have looked to private economic indicators to gauge the economic impact.
"U.S. government shutdowns have historically had only a muted market impact, so any quick shift in investor sentiment should not come as a surprise," said analysts at UBS Global Wealth Management.
"As official economic data resumes following the reopening of the government, more evidence of a cooling labor market should clear the path for further Fed easing."
Tuesday's weekly update of ADP's preliminary payroll figures pointed to continued weakness in the labor market, with private employers shedding an average of 11,250 jobs a week for the four weeks ending October 25.
Traders are currently pricing in a 63% probability of a 25-basis-point reduction at December's monetary policy meeting, according to CME Group's FedWatch tool.
A host of Fed policymakers, including New York President John Williams and Governor Christopher Waller, are scheduled to speak later in the day.
With the third-quarter earnings season slowly winding down, 82% of 446 companies in the S&P 500 have reported their profits above analyst expectations compared to a long-term average of 67%, according to LSEG data.
AI bellwether Nvidia's earnings next week could test the optimism around the technology which has driven markets to record highs this year, but come under more scrutiny in recent weeks.
Among other moves, U.S.-listed shares of Tencent Music Entertainment Group added 3.4% after quarterly results.
BILL Holdings (BILL.N), opens new tab jumped 11.1% after sources told Reuters that the payments firm was exploring a sale.
President Donald Trump is expected to host a private dinner with top business executives, including ones from the Nasdaq and JPMorgan Chase.
Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru; Editing by Maju Samuel
