US stocks gained ahead of Wednesday’s trading, aiming to resume their previous rally as Alibaba’s spending strategies and Micron Technology’s earnings enhanced outlooks for AI investments.
Futures for the Nasdaq 100 rose approximately 0.3%, while S&P 500 futures increased by about 0.2%. The Dow Jones Industrial Average futures, less reliant on technology stocks, were up roughly 0.1%.
A shift in sentiment regarding technology stocks is aiding the market’s slight recovery after the main indexes snapped their win streak on Tuesday, dealing with losses from major tech giants.
Alibaba’s shares surged over 9% in premarket trading, following the company’s CEO’s announcement to bolster AI investments beyond the initial $50 billion plan. This increase is crucial for the company to compete as global AI investments reach $4 trillion. Similarly, Micron’s better-than-expected quarterly results provided positive signals for AI stocks.
Ongoing discussions about potential interest rate cuts in the US have tempered optimistic gains. Recent remarks from Federal Reserve officials suggest increasing divisions regarding monetary policy in light of signs of a weakening labor market.
In a recent speech, Fed Chair Jerome Powell emphasized a cautious approach to any future rate cuts while acknowledging that stock valuations are relatively high. Wall Street is now anticipating the release of the Fed’s preferred inflation measure, the Personal Consumption Expenditures index, on Friday.
Before this release, updates on weekly mortgage applications and August home sales will provide insights into the housing market as well as the broader US economy.
