U.S. stock index futures moved higher on Wednesday evening as investors reacted to strong guidance from two influential chip companies, triggering a broad rally among technology and memory suppliers in after-hours trading.
Futures snapshot
S&P 500 Futures rose 0.5% to 7,468.0 points by 19:24 ET (23:24 GMT). Nasdaq 100 Futures climbed 1.9% to 30,076.0 points, while Dow Jones Futures gained 0.1% to 52,315.0 points. The gains in futures came after a mostly negative regular session on Wall Street, where investors remained cautious on technology following a significant sell-off in the sector earlier this week.
Drivers of the after-hours move
Two earnings and guidance beats in the semiconductor space set the tone. Micron Technology Inc (NASDAQ:MU) rose more than 16% in aftermarket trading after reporting strong quarterly results and issuing far stronger guidance for the current quarter than analysts had expected. In its commentary, Micron pointed to robust demand from artificial intelligence and data centers. The company warned that outsized AI-driven demand is likely to keep memory supplies tight, which in turn will support higher prices.
Chip designer Qualcomm Incorporated (NASDAQ:QCOM) also contributed to the upbeat tone. Qualcomm surged 13.3% after forecasting $15 billion in sales from its data center business by 2029, a projection that reinforced optimism about AI-related revenue streams in the chip-design space.
The twin updates helped alleviate some investor concern about stretched AI-fueled valuations in both technology and chipmaking - concerns that had pushed chip shares sharply lower earlier in the week.
Broad sector reaction
The positive news rippled across memory and chipmaker names in after-hours trading. Seagate Technology PLC (NASDAQ:STX), Western Digital Corporation (NASDAQ:WDC), and SanDisk Corporation (NASDAQ:SNDK), all manufacturers of memory products, each advanced by more than 8% in aftermarket trade. Chip designer Arm Holdings (NASDAQ:ARM) rose 6%, Broadcom Inc (NASDAQ:AVGO) increased 2%, Intel Corporation (NASDAQ:INTC) climbed 5.7%, while AMD (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA) added 3.6% and 0.7%, respectively.
Micron's South Korean competitors - SK Hynix Inc (KS:000660) and Samsung Electronics Co Ltd (KS:005930) - were at the center of the earlier rout in chip stocks. Both companies traded sharply higher in early South Korean sessions on Thursday, reflecting the cross-border reach of the sector move.
Equity markets and macro watchers
On the cash session, U.S. equity indexes closed mixed. The Dow Jones Industrial Average rose 0.35%, aided by a shift into more economically sensitive names, while the Nasdaq Composite and the S&P 500 finished down 0.4% and 0.1%, respectively. The diverging performance highlighted investor caution on technology even as some market participants rotated to cyclical areas.
Attention now turns to a series of economic releases due on Thursday. The Personal Consumption Expenditures (PCE) price index for May - the Federal Reserve's preferred inflation gauge - is the key data point. Core PCE inflation is expected to read at 3.4%, a figure that remains well above the Fed's 2% target and will be watched closely for implications on interest-rate policy. Market participants are increasingly concerned the Fed may keep rates unchanged for longer or even raise them again if inflation proves sticky.
Also on the calendar for Thursday are a final reading on first-quarter gross domestic product and weekly jobless claims data, both of which will provide additional context on the economic backdrop and the outlook for monetary policy.
What to watch next
In the near term, the interaction between incoming inflation and growth data and the recent corporate updates from major chip names will determine market direction. The aftermarket strength in memory and chip-design names illustrates the degree to which AI and data-center demand is shaping investor expectations for pricing power and supply tightness in memory markets.
Note: This article presents market moves and company guidance as reported in after-hours trading and ahead of scheduled economic releases; it does not attempt to forecast outcomes beyond the information provided.