Futures muted ahead of key triggers
By early morning trade, Dow Jones, S&P 500, and Nasdaq 100 futures were little changed. Monday’s Wall Street rally, driven largely by technology shares, kept sentiment supported. Investors remained cautious, however, as attention turned to upcoming corporate and economic signals.
Much of the optimism in tech followed Nvidia’s announcement of a $100 billion investment in OpenAI data centers, underscoring the AI infrastructure boom. Still, analysts noted questions around Nvidia’s strategy of funding a client to boost its own sales.
Micron earnings in spotlight
Micron Technology is scheduled to release its latest results after Tuesday’s closing bell. Expectations are high, with the chipmaker already revising its revenue forecast upward to about $11.2 billion for the quarter ended August 28. Analysts anticipate strong demand for Micron’s memory chips, used extensively in AI systems.
The company also forecast improved margins, with gross margin guidance lifted to 44.5%, citing stronger pricing trends. Micron’s leadership has said demand-supply dynamics remain favorable, boosting confidence in its AI-driven growth outlook.
Flash PMIs to gauge U.S. economy
Investors are also awaiting preliminary September business activity data. Economists expect the composite PMI to hold steady at 54.6, indicating continued expansion. Manufacturing PMI is seen easing to 52.2 from 53.0, while the services index is projected at 54.0 versus 54.5 in August.
These readings will be closely watched as a health check on the U.S. economy in the final stretch of the third quarter, particularly amid slowing global demand and monetary policy uncertainties.
Powell’s comments in focus
Federal Reserve Chair Jerome Powell is expected to speak later this week, following the Fed’s recent 25 basis point rate cut. Markets are eager for clarity on whether further reductions are likely before year-end.
While some Fed officials favor pausing cuts, Governor Stephen Miran has called for sharper easing, aligning with former President Donald Trump’s push for faster rate reductions. The CME FedWatch tool now indicates a 90% probability of another cut in October and a 75% chance of an additional move in December.
Oil prices retreat on Iraq pipeline deal
Global oil benchmarks extended losses as Iraq and the Kurdish regional government struck a preliminary agreement to resume exports via Turkey. The deal could bring back roughly 230,000 barrels per day, which had been halted since March 2023.
At last check, Brent crude was down 0.4% at $66.32 a barrel, while U.S. WTI fell 0.3% to $62.08. The International Energy Agency has projected faster global supply growth in the years ahead, raising the prospect of a surplus by 2026.
