June 24 (Reuters) – S&P 500 and Nasdaq futures inched higher on Wednesday after two straight sessions of declines, as investors returned to technology shares following a sharp selloff that saw the Nasdaq 100 lose over $1 trillion in market value.
Concerns over lofty hyperscaler spending through debt-funding and expectations of a more hawkish Federal Reserve drove the fall after a huge run-up in AI names that aided all three major indexes to record highs.
Memory chips moved higher in premarket trading, following a sharp plunge in the previous session, with Micron Technology and Sandisk adding 3.8% and 3.5%, respectively.
Micron’s results after the bell could offer clues on the outlook for the memory and AI sector after a blazing rally, with the memory chipmaker up 268% for the year.
“We will all be looking at Micron since that is a representation of what we’ve seen in this rally. I think people are going to get the blowout quarter that they expect, but I don’t expect the stock to continue to rise,” said Jay Woods, chief market strategist at Freedom Capital Markets.
“It’s fallen (after) six of its last eight earnings reports, even though Micron has reported blowout earnings.”
At 04:53 a.m. ET, Dow E-minis were down 76 points, or 0.15%, S&P 500 E-minis were up 7.5 points, or 0.1%, and Nasdaq 100 E-minis were up 141.25 points, or 0.48%.
Investors continued to monitor Middle East developments after the U.S. and Iran offered conflicting accounts on a range of key issues including financial incentives for Iran, control over the Strait of Hormuz and Israel’s war in Lebanon.
Optimism surrounding an end to the war and strong earnings growth expectations has put the S&P 500 on track for its strongest quarterly gain in six years, despite expectations of higher interest rates.
Traders are adding to bets of a second rate hike from the Fed by December end, according to CME Group’s FedWatch tool, from a prior expectation of a single 25-basis-point rise, after new chair Kevin Warsh emphasised the need to curb inflation.
The closely watched Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, could offer fresh insight on the monetary policy path on Thursday. Economists expect a rise to 4.1%, more than twice the central bank’s target.
Among early movers, Cerebras Systems tumbled 14% after the chip designer forecast full-year profit margins would drop below first-quarter figures in its debut report after going public.
FedEx slid 7.8% after reporting that margins in its core delivery segment shrank in the latest quarter from a year earlier.
(Reporting by Twesha Dikshit; Editing by Mrigank Dhaniwala)
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