(Bloomberg) — U.S. stock index futures fell after Micron Technology Inc.’s disappointing sales outlook. highlighted the risks of relying on artificial intelligence chip makers to fuel the stock rally.
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Also on investors’ radar Thursday is a slew of U.S. economic data that will help set the stage for Federal Reserve policy, after Fed Governor Michelle Bowman tempered market expectations for rate cuts. Treasury yields held up yesterday’s gains and a gauge for the dollar hovered around an eight-month high.
“It’s all about the Fed – staying higher for longer means keeping rates very high, which attracts money to the U.S. and keeps the dollar strong,” said Andrew Brenner, head of international fixed income at NatAlliance Securities LLC.
The European stock benchmark was little changed as traders remained on hold ahead of Sunday’s French election. Fashion retailer Hennes & Mauritz AB fell more than 14% after missing profit and revenue estimates. GSK Plc collapsed after U.S. health officials dealt a fresh regulatory blow to its blockbuster RSV vaccine.
Stocks in Japan, Hong Kong, South Korea and China all fell, pushing the MSCI Asia Pacific gauge towards its first loss in three days. The yen reversed some of the declines it made on Wednesday as it fell to 160.87 per dollar, its weakest level since 1986.
The most important indicator of MSCI Inc. for Chinese stocks are on track for a technical correction as traders struggle to find catalysts ahead of a meeting of the country’s top leaders in July. The MSCI China Index fell as much as 2% on Thursday, from its May 20 high to around 10%.
Shares of Micron Technology (MU) fell in extended US trading after the computer memory chip maker disappointed some investors who hoped it would benefit from the AI computing boom. The news dragged down a number of other chipmakers, including giant Nvidia Corp. (NVDA).
Wall Street’s latest attempt to break out of the mega-cap pack was short-lived, with a slew of measures continuing to show market breadth remains weak, adding to uncertainty about the rally’s staying power. According to Bloomberg Intelligence, the S&P 500’s (^GSPC) performance-breadth split has reached one of its worst levels in three decades.
In commodities, gold held steady after a two-day decline, while oil traded within a narrow range ahead of the next round of US economic data.
Main events this week:
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Chinese industrial gains, Thursday
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Economic confidence in the eurozone, consumer confidence, Thursday
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US Durable Goods, Initial Jobless Claims, GDP, Thursday
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Nike will publish its profit figures on Thursday
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Japan Tokyo CPI, unemployment, industrial production, Friday
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US PCE inflation, spending and income, University of Michigan consumer confidence, Friday
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The Fed’s Thomas Barkin will speak on Friday
Some of the major moves in the markets:
Shares
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S&P 500 futures fell 0.1% as of 3:27 a.m. New York time
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Nasdaq 100 futures fell 0.2%
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Futures on the Dow Jones Industrial Average fell 0.1%
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The Stoxx Europe 600 had changed little
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The MSCI World Index was little changed
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.0694
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The British pound rose 0.2% to $1.2642
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The Japanese yen rose 0.2% to 160.47 per dollar
Cryptocurrencies
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Bitcoin fell 0.4% to $60,730.09
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Ether fell 0.7% to $3,367.6
Bonds
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The yield on 10-year government bonds was little changed at 4.34%
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The German ten-year yield rose by two basis points to 2.47%
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The UK 10-year yield rose by three basis points to 4.16%
Raw materials
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West Texas Intermediate crude was little changed
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Spot gold rose 0.2% to $2,302.27 an ounce
This story was produced with the help of Bloomberg Automation.
—With assistance from Jan-Patrick Barnert and Richard Henderson.
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