Why Markets Are Watching Micron Earnings After Two Days of Tech Losses

TLDR

• US stock futures steadied Wednesday after a two-day tech selloff hit AI-related stocks hard.
• Micron’s earnings are due after the bell, with Wall Street watching for signals on AI chip demand.
• Cerebras, the AI chipmaker, dropped over 10% in premarket after forecasting margins below rivals like Nvidia.
• FedEx reported shrinking operating margins, blaming rising transport costs and shifting trade policy.
• Gold fell to around $4,098 per troy ounce as a stronger dollar and rate-hike fears weighed on the metal.

Wall Street took a brief breath on Wednesday after two straight days of selling in tech stocks. Futures pointed to a modest recovery, but investors had one eye fixed on Micron’s earnings report due after the close.

The Nasdaq 100 futures rose around 0.5% in early trading. S&P 500 futures edged up 0.1%. Dow Jones futures dipped slightly, weighed down by concerns about rising interest rates and heavy spending in the AI sector.

What Sparked the Selloff

The sell-off in tech came from a mix of worries. Investors have grown uneasy about high valuations for AI-linked companies, and fears of upcoming interest rate hikes added fuel to the fire.

Micron’s stock had been a big winner this year, up more than 250%. But on Tuesday, it dropped 13% as part of the broader tech rout. All eyes are now on its post-bell earnings for signs of how healthy AI chip demand really is.

Cerebras, which only went public in May, posted its first earnings report late Tuesday. The AI chipmaker’s shares fell more than 10% in premarket trading after it said profit margins would trail those of rivals like Nvidia.

Shipping Giant FedEx Warns on Margins

FedEx reported earnings after hours and flagged rising transportation costs and the effects of shifting trade policy as reasons for shrinking operating margins. The company is widely seen as a gauge for the broader economy, so its cautious tone added to the uncertain mood on Wall Street.

Its shares slid before Wednesday’s open.

On the geopolitical front, talks between Iran and Oman over potential fees for ships crossing the Strait of Hormuz added uncertainty. The US had previously said the waterway would remain free of tolls, but those discussions reopened questions about oil supply flows.

Gold Slips as Dollar Strengthens

Gold futures fell around 1.2% in early European trading to about $4,098 per troy ounce. A stronger US dollar and growing expectations of interest rate hikes pushed the metal lower.

Analysts at Saxo Bank noted that gold has been tracking the S&P 500 closely, which added to the downward pressure as stocks weakened.

The US dollar index edged up slightly to around 101.55.

Treasury yields also moved higher overnight, adding to the rate-sensitive mood across markets.

Investors were watching for any clues from Micron’s report that could either calm nerves or deepen the selloff. Given its 250% run this year, a miss on guidance could put further pressure on AI-linked names.

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