By Bansari Mayur Kamdar and Amruta Khandekar
(Reuters) -Wall Street was set to open higher on Thursday ahead of more economic data and commentary from Jerome Powell after the Federal Reserve chair stuck to the script overnight by saying the central bank still expects to cut rates later this year.
Powell said rate reductions will "likely be appropriate" later this year, "if the economy evolves broadly as expected" and once officials gain more confidence in inflation's steady decline.
The comments kept alive investors' expectations of an interest rate cut in June, giving a boost to U.S equities, which had faltered in the days leading up to the testimony.
Wall Street's main indexes closed higher on Wednesday, with rate-sensitive technology and chip stocks in the lead.
"We listened to Powell yesterday and it sounds like there will be at some point this year, a rate cut. We just don't know when," said Joe Saluzzi, co-manager of trading at Themis Trading.
All eyes will be back on Powell who is set to wrap up his two-day testimony on Thursday.
The number of Americans filing new claims for unemployment benefits was unchanged last week as the labor market continued to gradually ease, the Labor Department's data showed.
Investors now await the crucial nonfarm payrolls report, which could provide further details on the strength of the U.S. labor market on Friday.
"Even if the payrolls are stronger than expected, that's not going to take the rate cut argument off. Unless you start to see some extreme inflationary numbers, the odds are the cut is coming," Saluzzi said.
At 08:35 a.m. ET, Dow e-minis were up 92 points, or 0.24%, S&P 500 e-minis were up 21.75 points, or 0.43%, and Nasdaq 100 e-minis were up 107.25 points, or 0.59%.
Most megacap growth and technology stocks rose in premarket trading, while electric carmaker Tesla (NASDAQ:TSLA) fell 1.7%.
Chip stocks such as Nvidia and Micron Technology (NASDAQ:MU) gained 2.1% and 4.4%, respectively, and were set to extend their rally from the previous session.
Lingerie maker Victoria's Secret & Co dropped 30% on a weak annual forecast.
Eli Lilly (NYSE:LLY) slipped 1% after rival Novo Nordisk (CSE:NOVOb) said early trial data for its highly anticipated experimental drug, amycretin, showed that participants had a weight loss of 13.1% after 12 weeks.