US stock futures edged higher on Thursday as another surge in Treasury yields pulled the Dow towards a three-month low, while strong Micron earnings kept technology shares from joining the selloff.
Dow futures gained about 0.07%, S&P 500 futures hovered around flat and Nasdaq 100 futures gained roughly 0.6% or 202 points.
The 10-year Treasury yield climbed above 5.3% and the 30-year approached 5.7%, levels not seen since 2002.
Micron’s results reinforced confidence in AI spending, while Alphabet rose after unveiling Gemini 4 Argon.
Softer inflation reduced the odds of an October Fed hike, but long-term borrowing costs remain Wall Street’s bigger problem.
5 things to know before Wall Street opens
1. Treasury yields are setting the tone
The 10-year Treasury yield reached about 5.34%, while the 30-year touched roughly 5.68%, extending a brutal quarterly bond selloff.
The move is increasingly about more than the next Fed decision.
Investors are also demanding higher compensation for inflation, heavy government borrowing and the financing requirements of the AI investment boom.
2. Micron delivers the AI signal bulls wanted
Micron reported fiscal fourth-quarter revenue of $54.23 billion and adjusted earnings of $33.42 a share, both above forecasts.
It guided to about $61.5 billion of revenue this quarter, versus estimates near $57 billion. Customer commitments under long-term agreements increased to $32 billion from $22 billion in June.
The stock itself was relatively subdued, reflecting how much strength investors had already priced in.
3. Nvidia, AMD and Alphabet keep Nasdaq futures positive
Micron’s numbers lifted the wider semiconductor trade. Nvidia, AMD, Lam Research and Applied Materials gained in pre-market trading as investors read the report as confirmation that AI infrastructure spending remains strong.
Alphabet rose more than 2% after Google unveiled Gemini 4 Argon, its new flagship AI model aimed at complex software, enterprise and cybersecurity tasks.
That helps explain why Nasdaq futures were positive while Dow futures remained under pressure.
4. October Fed hike odds have fallen sharply
Wednesday’s softer PCE inflation reading changed the near-term rate debate.
Markets now assign roughly a 38% chance to an October hike, down from around 50% a day earlier and more than 70% a week ago.
Goldman Sachs has also shifted its forecast for the next rate increase to December.
Investors will hear from Christopher Waller, Philip Jefferson, Michelle Bowman and Lisa Cook on Thursday, according to the Federal Reserve’s official calendar.
5. Jobless claims and ISM could move bonds again
Weekly jobless claims arrive before the open, followed by September’s ISM manufacturing index at 10 am ET.
The ISM gauge stood at 54.6 in August, comfortably above the 50 level separating expansion from contraction.
A strong manufacturing reading could reinforce the idea that the economy can absorb higher rates and keep long yields elevated.
Oil is another complication, with Brent close to $100 as stalled US-Iran negotiations keep inflation risks alive.
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