Nasdaq futures gain as SK Hynix lifts chips ahead of Fed decision, earnings

Tech-focused Nasdaq 100 futures surged on Wednesday, propelled by memory-chip stocks following SK Hynix's impressive earnings report, as investors now turn their attention to a series of key corporate earnings and the Federal Reserve's rate decision. Memory chip giant Micron Technology rose 4.2% in premarket trading after SK Hynix, its South Korean counterpart, announced a more than sevenfold increase in quarterly profits.

SK Hynix shares climbed 8.5% on the US market, while storage firms SanDisk and Western Digital increased 1.9% and 5.1% respectively, while Seagate Technology lagged slightly, falling 1.5% after reporting its first-quarter results. Semiconductor sector stocks also enjoyed a boost, with Nvidia up 0.8%, AMD climbing 1.8%, and Marvell Technology adding 2.3%.

Alphabet shares climbed 1.5% following a report suggesting OpenAI may purchase Google's AI chips. Meanwhile, Dow E-minis slipped 121 points (0.23%), S&P 500 E-minis rose 10.75 points (0.14%), and Nasdaq 100 E-minis climbed 133.25 points (0.45%). The tech-heavy Nasdaq has gained approximately 2% this week, following a challenging start to the month, as AI sentiment improved after Anthropic disclosed its US IPO filing on Monday.

The focus now shifts to quarterly earnings from tech giants Microsoft and Alphabet, both expected to release results after the markets close on Wednesday, with investors closely watching their capital expenditure plans for evidence that large AI investments are generating returns, amid rising borrowing costs and concerns over the viability of debt-funded spending.

Demand remains robust, yet the market is increasingly scrutinizing what these investments truly produce, according to Jake Behan, head of capital markets at Direxion. Amazon.com and chipmaker Intel are set to report later in the week. The US Federal Reserve's interest-rate decision is anticipated at 2pm on Wednesday, with market expectations leaning toward a pause after last month's rate hike.

However, traders remain cautiously optimistic, with at least three 25-basis-point increases by late 2027 expected, given persistently high inflation due to Middle East energy cost increases tied to the conflict, bolstering the case for tighter monetary policy. Upcoming data points include September's Personal Consumption Expenditures report, the Fed's preferred inflation indicator, and third-quarter GDP growth, expected at 3.2% this week.

Other notable movers included Vertiv, which jumped 15.3% after raising full-year profit and revenue forecasts, and Robinhood Markets, which fell 7.2% after missing Wall Street estimates for third-quarter profit, while Visa saw a 1.8% dip following the release of fourth-quarter results.