Futures Up, Powell’s Upcoming Speech, Micron’s Outlook – What’s Influencing the Markets

US stock futures are indicating a positive opening on Thursday as investors anticipate comments from Federal Reserve Chair Jerome Powell and await new inflation data later this week. Shares of Micron surged in after-hours trading following the memory chip manufacturer’s release of current-quarter guidance that exceeded Wall Street’s expectations. Additionally, there are reports that OpenAI, the company behind ChatGPT, is planning to transition to a for-profit structure.

1. Futures Trend Upward

US stock futures have shown an upward trend as investors prepare for Powell’s remarks and a key inflation report set to be released on Friday.

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

The S&P 500 ended a two-day winning streak in the previous session, pulling back after China announced new economic stimulus measures.

On Wednesday, the benchmark index fell by 11 points (0.2%), and the Dow Jones Industrial Average decreased by 293 points (0.7%). By contrast, the tech-heavy Nasdaq Composite gained 8 points (0.04%).

Nonetheless, all three indices are trending towards monthly gains, largely fueled by the Fed’s recent decision to implement a significant 50-basis-point interest rate cut.

2. Powell Set to Address the Market

Fed Chair Jerome Powell will be a key speaker on Thursday, delivering pre-recorded remarks at the US Treasury Market Conference in New York at 09:20.

Following last week’s substantial rate cut, Powell indicated that this was part of a "recalibration" of policy aimed at sustaining the labor market while effectively reducing inflation to the Fed’s target of 2%.

Other Fed officials have supported this decision, including Fed Governor Adriana Kugler, who emphasized the need for a balanced approach between addressing price pressures and preventing broader economic pain.

However, there is not unanimous agreement on the size of the cut, with Fed Governor Michelle Bowman expressing concerns over persistent inflation risks, advocating for a more traditional 25-basis-point reduction instead.

3. Micron’s Positive Forecast

Micron’s shares jumped in after-hours trading after the company released current-quarter guidance that far surpassed analyst predictions, driven by robust demand for its memory chips utilized in artificial intelligence applications.

For its fiscal first quarter, Micron expects adjusted earnings per share of $1.74, plus or minus $0.08, on revenues of $8.70 billion, with a variance of $200 million. In contrast, Wall Street had estimated earnings of $1.58 per share and revenues of $8.35 billion.

Micron, alongside SK Hynix and Samsung, is among the leading manufacturers of high-bandwidth memory chips, essential for powering AI-driven graphics processing units.

CEO Sanjay Mehrotra mentioned that demand from data center clients remains strong, with healthy customer inventory levels.

In the fourth quarter, Micron reported adjusted earnings of $1.18 per diluted share on revenues of $7.75 billion, surpassing the analysts’ expectations of $1.11 per share and $7.65 billion in revenue.

4. OpenAI’s Business Transition

OpenAI is reportedly exploring a strategy to shift its core operations toward a for-profit model in order to attract more investors, with CEO Sam Altman expected to receive equity in the transition.

The company announced several high-profile management resignations, including its chief technology officer and chief research officer, among others.

This news comes as OpenAI seeks to raise over $6 billion in capital, with major investors such as Microsoft, Apple, Nvidia, and a UAE-based firm expected to participate.

Founded initially as a non-profit, OpenAI has been valued at approximately $150 billion, positioning it as one of the most valuable entities in Silicon Valley.

5. Oil Prices Decline

Oil prices fell on Thursday after a report indicated that Saudi Arabia plans to abandon its high crude price target while considering an increase in production.

At 03:30 ET, Brent crude dropped by 2.4% to $71.14 per barrel, and U.S. crude futures fell by 2.8% to $67.72 per barrel.

Earlier reports revealed that Saudi Arabia, the world’s second-largest oil producer, may discard its unofficial price target of $100 per barrel to facilitate increased output.

Additionally, Libya’s oil supply could return to the market following agreements between regional factions aimed at appointing a new central bank governor, set to resolve a crisis that has led to a loss of at least one million barrels per day in production.

The prospect of increased supply overshadowed the recent report indicating a more significant-than-expected decline in U.S. oil inventories.