U.S. futures rose on Thursday, setting the stage for new record highs as investors cheered Micron’s (MU) positive earnings and China’s promises of more stimulus as they awaited Jerome Powell’s response.
Dow Jones Industrial Average futures (YM=F) rose 0.4% while S&P 500 futures (ES=F) added 0.8% after both indicators fell from record highs at the close. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the gains, rising 1.5% amid a sharp rise in Micron’s shares.
Stocks are looking solidly positive again thanks to a double dose of optimism about AI trading and China’s stimulus measures, which could feed through to US markets.
Nvidia (NVDA) supplier Micron raised its revenue forecast for the next quarter, citing strong demand for its memory chips used in AI data centers. Chip stocks Nvidia, AMD (AMD), ASML (ASML) and STMicro (STM) rose in the wake of the earnings report.
Meanwhile, China’s top leaders signaled they were doing everything they could to revive the ailing economy with new promises to boost fiscal spending, stem the property crisis and shore up the stock market. A big jump in mainland stocks put the CSI 300 (000300.SS) on course for its best week in a decade.
The bullish mood was helped by growing expectations for another big rate cut by the Federal Reserve. Traders are pricing in a 60% chance of a 0.5% move at the November meeting, up from 40% a week ago.
Read more: What the Fed’s Rate Cut Means for Bank Accounts, CDs, Loans and Credit Cards
Investors are waiting for Fed Chair Powell’s statement later to test those hopes, the highlight of a parade of Fed speakers on Thursday. Their remarks will set the stage for Friday’s much-anticipated talk on the PCE index, the Fed’s preferred measure of inflation.
Data due Thursday could prove to be a catalyst, given how closely the market is now watching for signs of stress in the economy. A reading on second-quarter GDP and weekly jobless claims are on the agenda.
