US stock futures rise after bruising tech selloff; Micron earnings on tap

U.S. stock index futures rose on Tuesday evening after a bruising selloff in technology and chipmaking shares sparked deep losses on Wall Street, with focus turning to upcoming earnings from memory chip major Micron.

Traders parsed mixed signals on U.S.-Iran peace talks, although improving shipping activity in the Strait of Hormuz still saw oil prices fall further towards pre-war levels. Positive purchasing managers index data also provided some support.

S&P 500 Futures rose 0.2% to 7,453.25 points by 20:02 ET (00:02 GMT). NQU26 rose 0.4% 29,779.50 points, while YMU26 were flat at 52,100.0 points.

Wall St slammed by tech wipeout; Chips worst hit
Wall Street indexes fell sharply on Tuesday, hit chiefly by deep losses in tech and chip stocks.

Chips in particular were by far the worst performers, with the Philadelphia Semiconductor Index sliding nearly 8% for the day.

The selloff stemmed in part from South Korea, the world’s best-performing stock market this year. The KOSPI index slumped 10% on deep losses in high-flying chipmaking shares, with memory chip giants Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) both slid over 12%.

The sudden move down sparked heightened concerns that the artificial intelligence trade– a major driver of chip share gains this year– was now getting overcrowded. This in turn sparked a wave of selling in tech across the globe.

The tech-heavy NASDAQ Composite slid 2.2% on Tuesday. The S&P 500 shed 1.4%, while the Dow Jones Industrial Average fell 0.1%.
Losses in the Dow were limited by investors pivoting into non-tech sectors such as financials, utilities, and healthcare.

Micron tumbles, Q3 earnings on tap
Memory chip maker Micron Technology Inc (NASDAQ:MU) slid 13.2%, tracking losses in its South Korean peers. The company is among the largest memory chip makers in the world, along with Samsung and SK Hynix.

Shares rose 3.5% in aftermarket trade.

Micron is set to report its fiscal third-quarter earnings after the bell on Wednesday evening.

The print will be closely watched for more cues on AI-driven demand for memory, which has provided a major windfall to Micron and its peers over the past year.

But the earnings also come amid some doubts over sky-high AI-driven valuations, with investors holding lofty expectations for Micron’s guidance.

Micron is expected to post earnings per share of $19.92 on revenue of $34.66 billion for the three months ended May, according to Investing.com data.

PCE, GDP data awaited for more cues on rates
Focus this week will be squarely on upcoming PCE price index data for May, which is due on Thursday.

The print is the Federal Reserve’s preferred reading, and is widely expected to factor into the central bank’s plans for interest rates.

The print comes amid increasing concerns that sticky inflation will push the Fed into leaving interest rates unchanged, or even hiking them later this year. This notion was also a major weight on Wall Street, given that higher rates diminish future returns from growth sectors.
A final reading on first-quarter gross domestic product is also due on Thursday, and is expected to reflect some headwinds from the U.S.-Iran war, which began in late-February.