US Stock Market Update

Investing.com — US stock futures point higher on Thursday, with markets gearing up for fresh commentary from Federal Reserve Chair Jerome Powell and new inflation data later this week.

Micron (NASDAQ: MU) shares spike in extended hours dealmaking after the memory chip manufacturer unveiled current-quarter guidance that topped Wall Street expectations. Elsewhere, reports say ChatGPT-maker OpenAI is working on plans to restructure as a for-profit company.

1. Futures Higher

US stock futures edged into the green as investors awaited the statements from Powell and looking ahead to the release of the Fed’s preferred inflation reading on Friday.

By 03:29 ET (07:29 GMT), the Dow futures contract had gained 160 points or 0.4%, S&P 500 futures had added 43 points or 0.7%, and Nasdaq 100 futures had risen by 274 points or 1.4%.

The S&P 500 snapped a two-day winning streak in the prior session, retreating from advances made earlier this week after China announced a raft of new economic stimulus measures.

At the end of trading on Wednesday, the benchmark average had lost 11 points or 0.2%, and the 30-stock Dow Jones Industrial Average had fallen by 293 points or 0.7%. The tech-heavy Nasdaq Composite, meanwhile, had added 8 points or 0.04%.

However, all three indices are on pace to post monthly gains, with much of the upward impetus coming from the Fed’s decision to roll out a super-sized 50-basis point interest rate reduction last week.

2. Powell to Speak

Fed Chair Jerome Powell is due to headline a slate of speakers from the central bank on Thursday.

Powell will deliver pre-recorded remarks at the US Treasury Market Conference in New York at 09:20, according to the Fed’s website.

Following the outsized rate cut last week, Powell stated that the move was part of a “recalibration” of policy designed to protect the labor market while sustainably bringing inflation back down to the Fed’s stated 2% target.

Several other policymakers have defended the big drawdown, including Fed Governor Adriana Kugler, who commented that the rate-setting Federal Open Market Committee needs to “balance its focus” between suppressing price pressures and avoiding “pain” in the broader economy.

Fed officials, however, have not been unanimous in their support of the size of the cut. Fed Governor Michelle Bowman, who voted for lowering borrowing costs by a more traditional 25 basis points, has expressed concern over lingering inflation risks.

3. Micron’s Rosy Outlook

Shares in Micron surged in extended hours trading on Thursday after the chipmaker unveiled current-quarter guidance that was far above analysts’ expectations due to soaring demand for its memory chips used in artificial intelligence applications.

For its fiscal first quarter, Micron expects to report adjusted per-share income of $1.74, plus or minus $0.08, on revenue of $8.70 billion, also plus or minus $200 million, compared with Wall Street estimates of $1.58 and $8.35 billion, respectively.

Along with South Korea’s SK Hynix and Samsung, Micron is one of the largest manufacturers of high-bandwidth memory chips, which help power AI-fueled graphics processing units.

In a call with analysts, Micron CEO Sanjay Mehrotra mentioned that demand from data center customers “continues to be strong and customer inventory levels are healthy.”

Micron reported adjusted fourth-quarter earnings of $1.18 per diluted share on revenue of $7.75 billion. Analysts anticipated adjusted profit per share of $1.11 on revenue of $7.65 billion.

4. OpenAI Eyeing Plan to Move to For-Profit Structure

OpenAI is reportedly working on a plan to restructure its core business into a for-profit entity to make ChatGPT’s maker more attractive to investors, with CEO Sam Altman set to receive equity in the shift.

The company also announced several top management resignations, including its CTO Mira Murati, chief research officer Bob McGrew, and research vice president Barret Zoph.

OpenAI’s plans were initially reported by Reuters and come as it seeks investors for a capital raise exceeding $6 billion. Long-term investor Microsoft Corporation is expected to participate, along with Apple, Nvidia, and UAE-based firm MGX.

Notably, OpenAI, initially founded as a non-profit, has been valued at roughly $150 billion, making it one of Silicon Valley’s most valuable companies.

5. Oil Slumps

Oil prices fell Thursday following reports that Saudi Arabia plans to discard its lofty crude price target as it looks to expand production.

By 03:30 ET, the Brent contract dropped 2.4% to $71.14 per barrel, while U.S. crude futures traded 2.8% lower at $67.72 per barrel.

The Financial Times reported that Saudi Arabia, the world’s second-largest oil producer, is preparing to abandon its unofficial price target of $100 per barrel for crude to increase output.

Additionally, supply from Libya could return to global markets as agreements were made to appoint a new central bank governor—expected to resolve a crisis that had taken at least 1 million barrels per day offline.

This talk of additional supply overshadowed an Energy Information Administration report indicating that U.S. oil inventories fell more than expected last week.

(Reuters contributed to this report.)