US stock futures steadied on Wednesday following a challenging previous day for technology stocks, with investors looking to the upcoming earnings report from Micron Technology (MU) as a critical indicator of demand in the artificial intelligence sector.
Futures for the Nasdaq 100 (NQ=F) rose by 0.5%, while those for the S&P 500 (ES=F) saw a modest increase of 0.1%. This follows a period of significant losses for both indexes, particularly among AI-related stocks. In contrast, futures for the Dow Jones Industrial Average (YM=F), which contains fewer technology companies, experienced a slight decline of 0.1%.
Concerns over elevated valuations, substantial spending, and the expectation of imminent interest-rate hikes have led to a wave of profit-taking in high-flying AI-linked stocks. This shift has added to the volatility that tech stocks have recently experienced.
Micron’s earnings report, scheduled for release after the market closes on Wednesday, is anticipated to be a pivotal moment for Wall Street as it evaluates the degree of confidence to place in the AI market. The company’s shares have surged more than 250% this year; however, they fell 13% on Tuesday amidst the tech stock downturn.
In another development, Cerebras Systems reported its first earnings report since going public in May. The shares of the AI chipmaker saw a decline of over 10% in pre-market trading, attributed to forecasts indicating that its profit margins will not match those of competitors like Nvidia (NVDA).
In the broader geopolitical landscape, uncertainty looms over US-Iran negotiations, particularly regarding key issues that may affect global trade. Former President Trump had previously assured that the Strait of Hormuz would remain toll-free, but discussions between Iran and Oman have initiated talks about implementing fees for vessels traversing this vital shipping lane.
In the delivery sector, FedEx (FDX) reported shrinking operating margins in its after-hours earnings results, citing increasing transportation costs and the impacts of changing trade policies. The company, often regarded as a barometer for the overall economy, saw its shares dip in pre-market trading following the announcement.
