By Johann M Cherian and Tharuniyaa Lakshmi
Oct 1 (Reuters) – U.S. stock index futures rose on Thursday, buoyed by gains in chip and consulting stocks, even as inflation and mounting government debt concerns pushed Treasury yields to more than two-decade highs.
Micron Technology’s better-than-expected revenue forecast and $32 billion customer commitments under its supply agreements reinforced faith in the AI trade.
Nvidia and Advanced Micro Devices rose 0.7% and 0.5%, respectively, in premarket trading, while Lam Research gained 2.2%. Micron shares, however, slipped about 0.9% after nearly quadrupling this year.
Accenture jumped 16.4% after the consulting firm forecast full-year revenue growth above estimates, lifting peers. Cognizant climbed 8.3%, while blue-chip IBM gained 5.9%.
Still, sentiment remained fragile as global bond markets came under renewed pressure, with rising energy costs stoking inflation concerns and heavy investment in AI infrastructure reinforcing expectations that interest rates would remain elevated.
The yield on the benchmark 10-year Treasury note hit 5.3423%, its highest since 2002, a day after Treasuries logged their worst quarter since 1994.
“Despite the concerns, the AI trade continues to power markets forward, while other opportunities will present in areas of the market that are perhaps more defensive or inflation-proof,” said Tim Armitage, investment strategist at Quilter Cheviot.
The Cboe VIX index, seen as Wall Street’s fear gauge, climbed to a two-week high and was last at 16.31 points.
At 07:38 a.m. ET, Dow E-minis were up 41 points, or 0.08%, and S&P 500 E-minis were up 17.75 points, or 0.23%. Nasdaq 100 E-minis were up 164.25 points, or 0.54%.
Alphabet advanced 1.9% after announcing its Gemini 4 flagship AI model.
Wall Street had a rocky September, with the S&P 500 and Dow posting monthly declines during what has historically been a weak month for equities, while enthusiasm around AI helped the Nasdaq notch gains.
Softer-than-expected inflation data on Wednesday tempered expectations for an interest-rate hike later this month, with traders pricing in a 63% chance that the Federal Reserve would hold rates steady, according to CME Group’s FedWatch Tool.
“Traders have scaled back bets on a near-term Federal Reserve rate hike following softer consumer confidence and inflation readings, though policymakers have continued to signal support for another increase before year-end,” said Achilleas Georgolopoulos, senior market analyst at XM Trading.
Still, with inflation above the central bank’s 2% target, a December rate hike remained on the table.
Comments from policymakers Thomas Barkin, Christopher Waller, Philip Jefferson, Michelle Bowman and Lorie Logan could offer further clues on the policy path.
Investors also awaited weekly jobless claims and the Institute for Supply Management’s manufacturing activity report later in the day.
Among other stocks, Constellation Energy rose 3% after the utility signed a 20-year power purchase agreement with Amazon.com.
Rocket Lab gained 4.6% after the space company secured its largest-ever Electron commercial launch agreement, a 20-launch contract with Synspective.
(Reporting by Johann M Cherian and Tharuniyaa Lakshmi in Bengaluru; Editing by Arun Koyyur and Anil D’Silva)
Comments