Stock market today: US futures waver after key data as Micron slides
06/27/2024 20:26
A sell-off in Micron put a dent in the AI bullishness that has fueled the tech-driven rally, as investors eye fresh economic data.
US stock futures wobbled on Thursday after chipmaker Micron’s (MU) outlook put a dent in tech-rally hopes, as investors assessed fresh economic data ahead of an inflation reading key to Federal Reserve policy.
S&P 500 futures (ES=F) were little changed, paring earlier still-slight losses after rising Wednesday to close not far short of a new all-time high. Futures on the Dow Jones Industrial Average (YM=F) slipped 0.2%, while those on the tech-heavy Nasdaq 100 (NQ=F) were also flat.
Stocks are struggling in the wake of Micron's sales forecast for the current quarter, which met expectations but failed to satisfy investors looking for stellar outperformance from AI-linked companies.
Bullishness around AI has helped lift the benchmark S&P 500 (^GSPC) to a 15% gain this year. But concerns are growing that the rally could be at risk if the handful of tech companies driving most of those gains stop topping already lofty expectations.
Memory maker Micron's shares slid almost 5% in pre-market trading. Nvidia (NVDA) was down about 1%, reviving worries of a return to the sell-off that rattled markets last week.
Investors were weighing a new batch of economic data ahead of the PCE inflation print on Friday that will influence the Fed's thinking on timing of interest-rate cuts.
A reading on initial weekly jobless claims came in at 233,000, a decrease of 6,000 from the previous week, according to Department of Labor data. The print came in below a consensus expectation of 235,000. But recurring jobless claims rose to their highest since late 2021, suggesting it's taking longer for unemployed people to find a job.
Real gross domestic product (GDP) increased at an annual rate of 1.4% in the first quarter of 2024, according to the third estimate by the Bureau of Economic Development released on Thursday morning. The print was slightly higher than the prior estimate of 1.3%.
Inflation could also loom large in the first debate between President Joe Biden and former President Donald Trump on Thursday night.
On the corporate front, Levi Strauss (LEVI) shares sank over 15% in the wake of a second-quarter revenue miss for the jeans seller. Investors will look to Nike's (NKE) quarterly results after the bell for more clues to consumer resilience.
Live1 update
Why the Levi's quarter bothers me
Levi's (LEVI) shares are getting slammed by 15% in the pre-market following earnings.
And I think it's deserved for two reasons.
First, China sales tanked 10% from the prior year. I have been chatting to a good number of folks of late who have recently visited China. One theme is that Chinese consumers are feeling on the gloomy side and not spending like in years past. That mood is impacting demand for Levi's jeans, Starbucks (SBUX) coffee and — according to General Mills' (GIS) earnings call yesterday — Haagen Dazs ice cream.
It's hard to see the inflection point in China.
Same goes for the Levi's wholesale business, or the business that sells into department stores. Sales fell 4% from the prior year. The company's commentary suggests wholesale demand may not inflect until 2025.
I plan to put some of my concerns to Levi's CFO Harmit Singh today at 10:30 a.m. ET on Yahoo Finance. Tune in!
