(Bloomberg) — US equity-index futures slipped after Micron Technology Inc.’s disappointing sales outlook highlighted the risks of relying on artificial intelligence chip makers to fuel the stock rally.
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Also on investors’ radar Thursday is a raft of US economic data that will help set the path for Federal Reserve policy, after Fed Governor Michelle Bowman tempered market expectations for interest rate cuts. Treasury yields held yesterday’s rise and a gauge of the dollar hovered near an eight-month high.
“It’s all about the Fed — higher for longer is keeping the front end of rates very high, drawing money into the US and keeping the dollar strong,” said Andrew Brenner, head of international fixed income at NatAlliance Securities LLC.
Europe’s stock benchmark was little changed, with traders in holding mode ahead of Sunday’s French elections. Fashion retailer Hennes & Mauritz AB slumped more than 14% after missing profit and sales estimates. GSK Plc fell after US health officials delivered a fresh regulatory blow to its blockbuster RSV vaccine.
Stocks in Japan, Hong Kong, South Korea and China all declined, putting the MSCI Asia Pacific gauge on course for its first loss in three days. The yen pared some of the declines it made Wednesday when it tumbled to 160.87 per dollar, the weakest level since 1986.
MSCI Inc.’s key gauge for Chinese stocks is on course for a technical correction as traders struggle to find catalysts ahead of a July meeting of the nation’s top leaders. The MSCI China Index dropped as much as 2% on Thursday, taking declines from a May 20 high to about 10%.
Micron Technology (MU) shares slumped in extended US trading after the maker of computer memory chips disappointed some investors hoping it would profit from the AI computing boom. The news dragged down a number of other chipmakers including giant Nvidia Corp. (NVDA).
Wall Street’s latest attempt to broaden out of the megacap group was short-lived, with a bevy of measures still showing how market breadth remains weak — boosting uncertainty about the rally’s staying power. Bifurcation between S&P 500 (^GSPC) performance and breadth has reached one of the worst levels in three decades, according to Bloomberg Intelligence.
In commodities, gold steadied after a two-day decline, while oil traded in a narrow range ahead of the next round of US economic data.
Key events this week:
China industrial profits, Thursday
Eurozone economic confidence, consumer confidence, Thursday
US durable goods, initial jobless claims, GDP, Thursday
Nike releases earnings, Thursday
Japan Tokyo CPI, unemployment, industrial production, Friday
US PCE inflation, spending and income, University of Michigan consumer sentiment, Friday
Fed’s Thomas Barkin speaks, Friday
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 3:27 a.m. New York time
Nasdaq 100 futures fell 0.2%
Futures on the Dow Jones Industrial Average fell 0.1%
The Stoxx Europe 600 was little changed
The MSCI World Index was little changed
Currencies
The Bloomberg Dollar Spot Index fell 0.1%
The euro rose 0.1% to $1.0694
The British pound rose 0.2% to $1.2642
The Japanese yen rose 0.2% to 160.47 per dollar
Cryptocurrencies
Bitcoin fell 0.4% to $60,730.09
Ether fell 0.7% to $3,367.6
Bonds
The yield on 10-year Treasuries was little changed at 4.34%
Germany’s 10-year yield advanced two basis points to 2.47%
Britain’s 10-year yield advanced three basis points to 4.16%
Commodities
West Texas Intermediate crude was little changed
Spot gold rose 0.2% to $2,302.27 an ounce
This story was produced with the assistance of Bloomberg Automation.
—With assistance from Jan-Patrick Barnert and Richard Henderson.
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