U.S. stock futures hovered around the flatline ahead of crucial returns from chipmaker Micron and a slate of speeches from Federal Reserve policymakers. Sentiment around Micron is bullish heading into the figures, thanks to strong expected demand for its processors used in artificial intelligence infrastructure. Meanwhile, a preliminary reading of September business activity in the U.S. could offer a glimpse into the state of American companies in the last weeks of the third quarter.
1. Futures subdued
U.S. stock futures were muted on Tuesday, as investors looked ahead to the release of key earnings from semiconductor group Micron and comments from Fed Chair Jerome Powell.
By 03:29 ET (07:29 GMT), the Dow futures contract, S&P 500 futures, and Nasdaq 100 futures were all mostly unchanged.
The main averages on Wall Street advanced on Monday, powered in large part by a jump in technology shares. More fuel was poured on to enthusiasm around artificial intelligence following the announcement of a $100 billion investment by chip giant Nvidia in ChatGPT-maker and client OpenAI to help build out data centers -- although some observers were somewhat befuddled by Nvidia’s decision to fund a customer to help buy its equipment.
U.S. Treasuries came under some selling pressure after a series of Fed speakers sounded cautious notes about additional interest rate cuts in the future. Yields on the bonds, which tend to move inversely to prices, ticked higher.
2. Micron to report
More insight into the trajectory of the AI boom could come after the closing bell on Tuesday, when chip group Micron is expected to reveal its latest quarterly results.
Recent commentary around the maker of advanced memory and storage chips has been widely bullish, driven by hopes that soaring demand conditions and tighter supplies will support solid earnings and sales.
In August, Micron lifted its fiscal fourth-quarter revenue and adjusted profit forecast, citing an anticipated surge in returns from its memory chips used in AI infrastructure.
For the quarter ended on August 28, the firm said it now expects to post revenue of $11.2 billion, plus or minus $100 million, versus a prior outlook of $10.7 billion, plus or minus $300 billion.
Adjusted gross margin is also now seen coming in at 44.5%, plus or minus 0.5%, compared to previous guidance of 42%, plus or minus 1%.
Chief Business Officer Sumit Sadana said at the time that pricing trends have been "robust" and the company has had "great success in being able to push that pricing up."
3. Flash PMIs ahead
On the economic calendar, attention will home in on flash U.S. business activity figures for September.
Economists have forecast that S&P Global’s composite purchasing managers index for the month will match August’s reading of 54.6. A level above 50 indicates expansion.
Manufacturing sector PMI is tipped to edge down to 52.2 from 53.0, while the gauge of the services industry -- which accounts for much of U.S. output -- is projected to inch lower to 54.0 from 54.5.
4. Upcoming Powell comments in focus
Yet analysts at ING flagged that "what should get attention" are a number of public appearances by Fed officials, including Chair Jerome Powell.
His statements will come after the Fed chose to slash interest rates by 25 basis points at its latest policy meeting last week. But messaging from the central bank on the path ahead for borrowing costs left room for debate around further cuts before the end of 2025, placing more emphasis on any comments Powell may provide about the policy trajectory.
While some Fed officials have backed no more cuts for the rest of the year, recently-confirmed Fed Governor Stephen Miran on Monday called for aggressive reductions. Miran was hand-picked for the postition by President Donald Trump, who has repeatedly urged the Fed to rapidly draw down rates to bolster the economy.
Markets are now placing a roughly 90% chance of a quarter-point reduction in the Fed’s target rate from the current range of 4% to 4.25% at the central bank’s next meeting in October, according to CME’s closely-monitored FedWatch Tool. There is also about a 75% chance of another 25-basis point cut at the following gathering in December.
5. Oil slides
Oil prices dropped on continued oversupply concerns, after a preliminary agreement was reached between Iraq and Kurdish regional governments to restart an oil pipeline.
At 03:30 ET, Brent futures dropped 0.4% to $66.32 a barrel, and U.S. West Texas Intermediate crude futures fell 0.3% to $62.08 a barrel.
Both contracts are currently suffering a five-session losing streak.
Iraq’s federal and Kurdish regional governments reached a deal with oil firms to resume crude exports via Turkey on Monday, Reuters reported, potentially allowing exports of about 230,000 barrels per day to resume, having been suspended since March 2023.
In its latest monthly report, the International Energy Agency said world oil supply will rise more rapidly this year and a surplus could expand in 2026 as OPEC+ members increase output and supply from outside the group grows.
Source :
https://www.investing.com/news/economy-news/micron-to-report-flash-pmis-ahead-powell-to-speak--whats-moving-markets-4250457
