S&P 500, Nasdaq futures edge higher as tech shares stabilize

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S&P 500, Nasdaq futures rebound

Highlights

Micron Technology rises 3.8% premarket and Sandisk gains 3.5% as tech shares rebound after a sharp selloff driven by debt-funded AI spending and Fed concerns.
At 04:53 a.m. ET, S&P 500 E-minis rise 0.1%, Nasdaq 100 E-minis add 0.48%, while Dow E-minis fall 0.15%; Cerebras Systems plunges 14% and FedEx drops 7.8% on margin warnings.
Traders increase bets on a second Fed rate hike by December as markets await Thursday's PCE Price Index, with expectations for a 4.1% inflation reading.

Tech rebound and key market drivers

As reported by Reuters, premarket trading shows a modest recovery in chip and technology names after the previous session's sharp selloff, with Micron Technology rising 3.8% and Sandisk adding 3.5%. Investors are watching whether the bounce can hold after concerns over heavy debt-funded spending by hyperscalers and a more hawkish Fed outlook pressured AI-linked shares.

Micron's results due after the bell are seen as an important test for sentiment across the memory and artificial intelligence segment after a powerful rally. Jay Woods, chief market strategist at Freedom Capital Markets, said investors expect a strong quarter from Micron, but he does not expect the stock to keep climbing.

At 04:53 a.m. ET, Dow E-minis are down 76 points, or 0.15%, S&P 500 E-minis are up 7.5 points, or 0.1%, and Nasdaq 100 E-minis are up 141.25 points, or 0.48%. Among other early movers, Cerebras Systems falls 14% after saying full-year profit margins will come in below first-quarter levels in its first report since going public, while FedEx drops 7.8% after reporting weaker margins in its core delivery business from a year earlier.

Rate outlook and broader market impact

Investors continue to track Middle East developments after the U.S. and Iran offer conflicting accounts on issues including financial incentives for Iran, control over the Strait of Hormuz and Israel's war in Lebanon. Even with that geopolitical uncertainty, optimism about a possible end to the war and expectations for strong earnings growth put the S&P 500 on track for its strongest quarterly gain in six years.

At the same time, traders are increasing bets that the Fed will deliver a second rate hike by the end of December, according to CME Group's FedWatch tool, after Chair Kevin Warsh emphasizes the need to contain inflation. Attention is now turning to Thursday's Personal Consumption Expenditures Price Index, with economists expecting the Fed's preferred inflation gauge to rise to 4.1%, more than double the central bank's target.

In our earlier coverage of the tech-led selloff, we noted that U.S. stock futures turned mixed as Wall Street tried to stabilize after roughly $1.3 trillion was erased from Nasdaq 100 market value in two sessions. The report highlighted Micron’s earnings as a key test for confidence in the AI trade, while also flagging added pressure from Cerebras’ post-IPO update, FedEx’s results, and lingering geopolitical uncertainty that could keep volatility elevated.

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