U.S. equity futures are modestly lower ahead of the first major test of Big Tech earnings. At 5:39 a.m. ET, S&P 500 futures were down 0.29%, Dow futures were down 0.09% and Nasdaq 100 futures were down 0.71%. Russell 2000 futures were down roughly 0.2%. Semiconductor weakness is weighing on growth stocks, while Alphabet and Tesla results after the close will test whether AI spending and elevated valuations can continue supporting the market.
U.S. equities rallied Tuesday as investors rebuilt positions in chip and AI-related stocks. The S&P 500 gained 0.89%, the Dow rose 0.74%, the Nasdaq advanced 1.29% and the Russell 2000 climbed 1.5%. The Philadelphia Semiconductor Index surged 5.2% for its second consecutive gain after entering bear-market territory last week.
Breadth was positive, with advancers leading decliners by 1.44:1 on the NYSE and 1.65:1 on the Nasdaq. Trading activity remained light, however, with 16.14 billion shares changing hands across U.S. exchanges versus a 20-session average of 19.56 billion.
The rates and commodity backdrop is less supportive this morning. The 2-year Treasury yield is near 4.27%, the 10-year is around 4.63% and the 30-year is near 5.14% as surging oil revives inflation concerns. The DXY is near 101.10, the euro is around $1.1404, sterling is near $1.3368, and the dollar is trading around a 40-year high near ¥163.2.
WTI crude is up more than 4% near $88, while Brent is close to $95, its highest level in roughly six weeks. Threats to Saudi tanker traffic in the Red Sea have added the Bab el-Mandeb Strait to existing concerns around the Strait of Hormuz. Gold is up about 1.2% near $4,120, supported by geopolitical demand despite elevated Treasury yields.
The domestic economic calendar is light. Weekly mortgage-market data are due at 7:00 a.m. ET, followed by the EIA petroleum inventory report at 10:30 a.m. Consensus calls for a crude-stock draw of approximately 1.5 million barrels. The Federal Reserve is widely expected to leave rates unchanged next week, although higher oil keeps the risk of additional tightening elevated.
Sector Highlights
Nine of the 11 S&P 500 sectors finished higher. Information Technology led with a 2.35% gain, while Consumer Staples fell 1.0% and Communication Services declined 0.85%. The advance was constructive but remained heavily dependent on semiconductors: Sandisk gained 14.3%, Western Digital rose 12.5% and Micron advanced 12.2%.
Information Technology
- Super Micro Computer (SMCI +16.8% premarket) surged after reporting more than $60 billion in fourth-quarter orders and forecasting gross margins of 15%–17%, roughly double its previous guidance.
- Texas Instruments (TXN -1.7% premarket) declined ahead of results after the close as broader semiconductor shares gave back part of Tuesday’s rebound.
- Sandisk (SNDK +14.3%), Western Digital (WDC +12.5%) and Micron Technology (MU +12.2%) led Tuesday’s memory-stock rally.
Communication Services
- Alphabet (GOOGL) reports after the close. Investors will focus on Search and cloud growth, delays affecting a key AI model, and whether capital spending is producing adequate returns.
- AT&T (T) reports before the open, with wireless subscriber additions, pricing and free cash flow likely to drive the reaction.
Consumer Discretionary
- Tesla (TSLA) reports after the close. Vehicle margins, cash flow and spending on autonomous driving and robotics will be the primary focus.
- Hasbro (HAS +8.8%) rallied Tuesday after raising its annual revenue and profit forecasts on strength in digital gaming and Magic: The Gathering.
- Genuine Parts (GPC -2.7%) declined after lowering its full-year earnings outlook.
Industrials
- 3M (MMM +7.3%) advanced after raising its full-year profit forecast.
- Southwest Airlines (LUV) reports after the close, with pricing, capacity and higher fuel costs in focus.
Health Care
- Danaher (DHR -11.0%) was Tuesday’s largest S&P 500 decliner after reducing its core revenue-growth forecast and reporting weaker biotechnology revenue.
Financials
- MSCI (MSCI -10.0%) fell after raising its full-year operating-expense forecast despite better-than-expected revenue.
Consumer Staples
- Philip Morris International (PM) reports before the open, with smoke-free product volumes, pricing and currency effects likely to be the key variables.
