(Reuters) – U.S. stock index futures fell on Thursday as Micron Technology slumped after an unimpressive forecast for the current quarter and pulled other chip stocks lower, while caution over economic data and a presidential debate also dampened sentiment.
Shares of the memory chip maker lost 5.5% premarket after fourth-quarter revenue forecasts were largely in line with expectations and disappointed investors expressed optimism about the company’s performance in the AI boom. Optimism around AI-powered demand had sent the stock up 14% this month, ahead of the earnings report.
Other semiconductor stocks, including Nvidia, Arm Holdings, Qualcomm and Advanced Micro Devices, fell between 0.8% and 1.1%.
With a handful of expensive, heavily weighted stocks supporting Wall Street’s rise since the last leg of 2023, market participants have highlighted concerns about the rally’s sustainability and called for the need to diversify portfolios to hedge against potential sharp losses .
Wall Street’s three major indexes posted modest gains in Wednesday’s choppy trading, with Amazon.com reaching $2 trillion in market value for the first time. Shares of the retail giant fell Thursday in lackluster trading in mega-cap tech stocks.
The focus now shifts to a range of economic data, including durable goods for May, weekly jobless claims, and first-quarter PCE and GDP numbers before markets open, just a day before the Federal Reserve’s preferred inflation gauge: the monthly personal consumption expenditure (PCE). price index.
Investors have largely stuck to their view of about two rate cuts this year, as LSEG’s FedWatch data shows, even though the U.S. central bank has forecast only one. The probability of an interest rate cut by at least 25 basis points in September is 56.4%.
Furthermore, President Joe Biden and former President Donald Trump will meet during the day in the first debate ahead of their rematch in November.
At 5:27 a.m. ET, the Dow e-minis were down 73 points, or 0.18%, the S&P 500 e-minis were down 8.75 points, or 0.16%, and the Nasdaq 100 e-minis were down 39 .5 points, or 0.2%.
Further on the earnings front, Walgreens Boots Alliance will announce its results before the market opens, with shares up 2.1% in early trading, while Nike will be out after the closing bell.
Denim maker Levi Strauss fell 15% after missing expectations for second-quarter revenue, while U.S.-listed shares of Canada’s BlackBerry rose 7.2% after beating first-quarter revenue expectations.
International Paper fell 14.8% after the world’s largest pulp producer, Brazil’s Suzano, ended talks to acquire the US company.
(Reporting by Ankika Biswas in Bengaluru; Editing by Maju Samuel)
