US markets seek footing as Micron earnings test AI demand
Investors await semiconductor giant’s results for clarity on artificial intelligence spending, while the Dow prepares for a major index rebalance.
US stock futures stabilised on Wednesday following two days of steep declines in technology stocks, as market participants looked to Micron’s earnings report for signals on the sustainability of artificial intelligence demand. Nasdaq 100 futures rose approximately 0.4%, while S&P 500 futures hovered near flat, contrasting with a 0.2% drop in Dow Jones Industrial Average contracts. The consolidation comes amid profit-taking driven by concerns over lofty valuations, massive capital expenditure in the AI sector, and fears of potential interest rate hikes.
Micron shares, which have risen more than 250% this year, fell 13% on Tuesday as the broader tech sector took a hit. The semiconductor giant’s results, due after the bell on Wednesday, are being closely watched by Wall Street to assess how much faith investors should place in the current AI rally. The earnings focus follows a disappointing start for Cerebras, an AI chipmaker that went public in May. Cerebras shares dropped over 10% in premarket trading after forecasting profit margins that would lag behind rivals such as Nvidia.
In the commodities market, gold prices extended a decline, dropping below $4,100 an ounce. Investors sold bullion to cover losses in equity markets, a trend exacerbated by a stronger US dollar and hawkish commentary from the Federal Reserve. The dollar rose 0.4% on Tuesday, making gold priced in US currency more expensive for international buyers. The precious metal, often viewed as a safe haven, frequently falls during broad cross-market selloffs as it serves as a source of liquidity for distressed portfolios.
Corporate developments also dominated the news cycle. Alphabet is scheduled to replace Verizon in the Dow Jones Industrial Average on June 29. The S&P Dow Jones Indices stated that Alphabet’s inclusion would broaden and strengthen the index’s exposure to artificial intelligence, cloud computing, and digital advertising, citing its larger market capitalisation and the breadth of its businesses. Meanwhile, SK Hynix announced plans to raise 45.45 trillion won ($29.4 billion) by selling depositary receipts on the Nasdaq exchange, with trading expected to commence on July 10.
Other corporate reports highlighted mixed economic signals. FedEx cited rising transportation costs and the impacts of shifting trade policies for shrinking operating margins in its after-hours earnings report, causing its shares to slide before the bell. Geopolitical uncertainty also persisted, with Iran and Oman discussing a fee system for ships crossing the Strait of Hormuz, despite President Trump’s pledges that the waterway would remain free of tolls.
