U.S. stock futures were largely flat Wednesday, as investors weighed Federal Reserve Chair Jerome Powell’s comments and strong quarterly guidance from semiconductor maker Micron. Powell offered a cautious perspective on the outlook for interest rates, highlighting the dual pressures of soft employment data and persistent inflation, while Micron’s forecast for the current quarter exceeded expectations, fueled by robust demand from AI developers.
Muted futures ahead of Powell commentary
By 03:38 ET, Dow and S&P 500 futures were mostly unchanged, while Nasdaq 100 futures edged up 21 points, or 0.1%. Wall Street’s major indexes had fallen in the previous session, breaking a three-day streak of record closes.
Shares of Nvidia, a favorite among AI investors, slipped, particularly weighing on the tech-heavy Nasdaq Composite, retreating from gains earlier in the week driven by its announcement of a $100 billion investment in OpenAI. Meanwhile, Boeing shares gained after the planemaker revealed an $8 billion order from Uzbekistan Airways.
Powell maintains a cautious tone
Tuesday’s main focus was Powell, speaking just days after the Fed cut rates by 25 basis points and indicated that additional cuts might follow. The Fed chair remained noncommittal about the trajectory of interest rates, noting that policymakers must navigate the simultaneous challenges of slowing job growth and sticky inflation.
In theory, reducing rates can encourage investment and hiring, though it carries the risk of pushing prices higher. Powell emphasized that there is no “risk-free” path for the central bank, even as markets price in potential rate reductions at the Fed’s October and December meetings. Signs are emerging that Fed officials will likely debate vigorously at those gatherings. Other Fed members also offered statements on Tuesday, defending both sides of the policy argument.
“Fed Chair Jerome Powell broadly reiterated his cautious view yesterday, signalling there is some balance between downside employment risks and upside inflation risks. The result is still a more hawkish tone by the chair relative to the FOMC consensus, as expressed by the median Dot Plot,” analysts at ING noted.
Micron’s AI-driven guidance impresses
Micron (NASDAQ:MU) shares rose in premarket trading after the company posted another quarter of growth driven by surging demand for memory chips from AI developers. CEO Sanjay Mehrotra said on the post-earnings call that the stronger-than-expected performance was powered by demand for its DRAM and NAND products.
Looking ahead, Micron expects the midpoint of its adjusted profit per share for the current quarter to reach $3.75 on projected revenue of $12.5 billion, plus or minus $300 million. Analysts had predicted $3.10 per share and $11.91 billion in revenue. Mehrotra noted that supply remains “tight,” while demand for DRAM processors should remain “healthy” next year.
To support production, Micron plans to increase its investment in the U.S. semiconductor sector to $200 billion, with $4.5 billion expected to be spent in the current quarter. For the quarter ending in August, tripling sales in its cloud memory segment to $4.5 billion helped overall revenue surge 46% to $11.32 billion, also surpassing expectations.
Alibaba ramps up AI investment
Shares of Alibaba Group (NYSE:BABA) in Hong Kong climbed more than 8% after unveiling its most powerful AI model yet and announcing plans to expand investment in the infrastructure supporting the technology. At its annual conference, Alibaba introduced Qwen3-Max, a language model with over 1 trillion parameters, excelling in code generation and autonomous agent tasks.
CEO Eddie Wu emphasized that Alibaba will continue increasing its previously announced AI infrastructure investment of 380 billion yuan ($53.4 billion) over the next three years but did not specify a new target. Other products introduced included Qwen3-Omni, a multimodal system aimed at immersive experiences like virtual reality and smart vehicle cockpits, demonstrating Alibaba’s goal of expanding AI beyond chatbots.
Gold holds near record highs
Gold prices stabilized, remaining near recent all-time peaks as Powell’s remarks fueled caution regarding growth, inflation, and rates. Expectations of further Fed rate cuts before the end of 2025 have lent support to gold, as lower rates enhance the appeal of non-yielding assets. Investors are also watching upcoming economic data, which may provide insight into inflation and overall economic activity. Heightened geopolitical uncertainty continues to bolster gold’s safe-haven status.
Spot gold rose 0.3% to $3,775.56 an ounce, while gold futures slipped 0.2% to $3,807.92/oz by 03:29 ET.
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