Nasdaq futures rise as chip stocks gain ahead of Fed decision and big tech earnings

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Nasdaq futures rise on chips

Highlights

Nasdaq 100 E-minis rise 0.41% as chip stocks rally on SK Hynix’s sevenfold profit jump and Micron’s 4% premarket surge.
Investors await Microsoft and Alphabet earnings after market close, focusing on cloud growth and AI capex returns amid improving sentiment.
Federal Reserve expected to maintain rates at 2 p.m. ET, while markets price in three more 25-basis-point hikes by late 2027 due to inflation pressures.

Chip rally and earnings focus

As reported by Reuters, gains in Nasdaq futures are driven in part by memory-chip shares after SK Hynix reports a more than sevenfold jump in quarterly profit, helping lift Micron Technology 4% in premarket trading and sending SK Hynix's U.S.-listed shares up 7.8%. Data storage firms Sandisk and Western Digital also trade higher, while Seagate Technology falls 3.7% after its first-quarter results.

The broader semiconductor group is also advancing, with Nvidia up 0.8%, AMD rising 1.5% and Marvell Technology adding 1.7%. Alphabet gains 1.2% after a media report says OpenAI plans to buy Google's AI chips.

At 04:53 a.m. ET, Dow E-minis are down 88 points, or 0.17%, S&P 500 E-minis are up 7.25 points, or 0.1%, and Nasdaq 100 E-minis are up 122 points, or 0.41%. The Nasdaq has gained about 2% so far this week after a difficult first half of the month, with sentiment toward AI improving following Anthropic's U.S. IPO filing on Monday.

Attention now turns to quarterly results from Microsoft and Alphabet after Wednesday's close, with both expected to post faster cloud growth. Amazon.com and Intel are due later this week, while GE Vernova, Biogen and Boston Scientific are set to report before the opening bell on Wednesday.

Rate outlook and pressure on AI spending

Markets are also awaiting the U.S. Federal Reserve's interest rate decision at 2 p.m. ET, with consensus largely favoring a pause after last month's hike. Even so, traders still see at least three 25-basis-point increases by late 2027, according to LSEG data, as inflation measures remain pressured by higher energy costs linked to the ongoing conflict in the Middle East.

Investors are expected to closely examine capital expenditure plans from major technology groups for evidence that large AI investments are producing returns. Jake Behan, head of capital markets at Direxion, says demand remains strong, but accelerating capex is increasing market focus on what that spending ultimately delivers, making it harder to justify the current pace if skepticism about AI returns grows.

Those expectations may be tested further by Thursday's September Personal Consumption Expenditures report, the Fed's preferred inflation gauge. Third-quarter GDP data, expected to show 3.2% growth, is also due this week.

Among other stock movers, Robinhood Markets drops 8% after missing Wall Street estimates for third-quarter profit, while Visa slips 1.7% after reporting fourth-quarter results.

In our earlier coverage of the S&P 500’s push toward the 8,000 level, we noted that the AI-led midsummer rally was facing a tougher test as investors shifted focus to third-quarter earnings. That piece highlighted how higher oil prices and elevated Treasury yields were raising the bar for results—while concentration in a handful of megacap and chip-related leaders, along with weakening market breadth, increased the market’s vulnerability to disappointment.

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