Futures Rise, Powell to Speak, Micron’s Outlook – Market Movers Explained

US stock futures are up on Thursday as markets await comments from Federal Reserve Chair Jerome Powell and new inflation data later this week. Shares of Micron surged in after-hours trading following the memory chip manufacturer’s announcement of quarterly guidance that exceeded Wall Street’s expectations. Additionally, reports indicate that OpenAI, the creator of ChatGPT, is planning to transition into a for-profit business model.

1. Futures Increase

US stock futures have moved into positive territory as investors anticipate Powell’s statements and prepare for the release of the Fed’s preferred inflation measure on Friday.

As of 03:29 ET (07:29 GMT), Dow futures rose by 160 points (0.4%), S&P 500 futures climbed by 43 points (0.7%), and Nasdaq 100 futures increased by 274 points (1.4%).

The S&P 500 ended a two-day winning streak in the previous session, pulling back after China’s announcement of new economic stimulus measures. On Wednesday, the index fell by 11 points (0.2%), while the Dow Jones Industrial Average declined by 293 points (0.7%). In contrast, the Nasdaq Composite recorded a slight gain of 8 points (0.04%).

Regardless, all three indices are on track for monthly gains, largely thanks to the Fed’s significant 50-basis point interest rate cut from last week.

2. Powell’s Upcoming Speech

Fed Chair Jerome Powell is scheduled to speak on Thursday at the US Treasury Market Conference in New York at 09:20 ET. Powell’s recent remarks on the rate cut highlighted a "recalibration" of policy aimed at balancing labor market stability with efforts to bring inflation back down to the Fed’s 2% target.

Some policymakers, including Fed Governor Adriana Kugler, have supported this substantial rate reduction, discussing the need to manage price pressures while avoiding overall economic distress. However, not all officials agree on the extent of the cut, as Fed Governor Michelle Bowman expressed concerns about persistent inflation risks.

3. Micron’s Promising Forecast

Micron’s shares rose sharply in after-hours trading after the company provided a current-quarter forecast significantly above analyst expectations, driven by strong demand for memory chips used in artificial intelligence applications.

For its fiscal first quarter, Micron anticipates adjusted earnings of $1.74 per share on revenue of $8.70 billion, surpassing Wall Street estimates of $1.58 and $8.35 billion, respectively. The company, alongside major competitors in South Korea, plays a vital role in the production of high-bandwidth memory chips essential for AI-driven technology.

Micron’s CEO, Sanjay Mehrotra, indicated that demand from data center clients remains robust, with inventory levels appearing healthy. The company recently reported fourth-quarter earnings of $1.18 per diluted share on revenue of $7.75 billion, exceeding analysts’ expectations.

4. OpenAI’s Shift to a For-Profit Model

OpenAI is reportedly restructuring to become a for-profit entity to enhance its appeal to investors, with CEO Sam Altman expected to receive equity in the transition. The company also experienced a wave of high-profile management resignations, including its CTO and chief research officer.

The restructuring plan aligns with OpenAI’s efforts to secure over $6 billion in funding, with long-term investor Microsoft likely to participate, alongside other major companies.

OpenAI, originally founded as a non-profit, has attained a valuation of approximately $150 billion, positioning it as one of Silicon Valley’s most valuable firms.

5. Decline in Oil Prices

Oil prices fell on Thursday after reports indicated that Saudi Arabia would abandon its ambitious crude price target in favor of increasing production. By 03:30 ET, the Brent contract declined by 2.4% to $71.14 per barrel, while U.S. crude futures (WTI) were down 2.8% to $67.72 per barrel.

The Financial Times reported plans from Saudi Arabia to eliminate its unofficial $100 per barrel price target as it boosts output. Additionally, Libya’s supply could return to the global market, following agreements aimed at resolving a production crisis that has significantly affected output levels.

This anticipated increase in supply overshadowed recent reports of a larger-than-expected decrease in U.S. oil inventories.