Dow futures remained near the flatline as investors awaited significant earnings reports from chipmaker Micron, alongside a series of addresses from Federal Reserve officials. Sentiment surrounding Micron appears optimistic as it approaches the upcoming figures, driven by robust anticipated demand for its processors utilized in artificial intelligence infrastructure. In the interim, an initial assessment of September’s business activity in the U.S. may provide insights into the condition of American enterprises as the third quarter draws to a close.

On Tuesday, Dow futures exhibited a subdued performance, as market participants anticipated the forthcoming earnings report from the semiconductor company Micron and remarks from Federal Reserve Chair Jerome Powell. As of 03:29, the futures contracts for the Dow, S&P 500, and Nasdaq 100 exhibited minimal variation. The primary indices experienced an uptick on Monday, significantly bolstered by a surge in technology stocks. The announcement of a $100 billion investment by chip giant Nvidia in ChatGPT-maker and client OpenAI has further fueled enthusiasm surrounding artificial intelligence, although some observers expressed confusion regarding Nvidia’s choice to finance a customer to facilitate the purchase of its equipment. U.S. Treasuries experienced selling pressure following remarks from several Federal Reserve officials who expressed caution regarding potential future interest rate cuts. The yields on bonds, which typically exhibit an inverse relationship with prices, have increased.

Further understanding of the trajectory of the AI boom may emerge following the closing bell on Tuesday, as chip manufacturer Micron is anticipated to disclose its most recent quarterly results. Recent commentary regarding the manufacturer of advanced memory and storage chips has been predominantly optimistic, fueled by expectations that increasing demand and constrained supplies will bolster robust earnings and sales. In August, Micron raised its fiscal fourth-quarter revenue and adjusted profit forecast, attributing this adjustment to an expected increase in returns from its memory chips utilized in AI infrastructure. For the quarter ending August 28, the company indicated it anticipates revenue of $11.2 billion, with a margin of error of $100 million, compared to a previous forecast of $10.7 billion, with a margin of error of $300 million. Adjusted gross margin is now projected to be 44.5%, with a variance of plus or minus 0.5%, in contrast to earlier guidance of 42%, with a variance of plus or minus 1%. Chief Business Officer Sumit Sadana remarked that pricing trends have been “robust” and the company has experienced “great success in being able to push that pricing up.”

On the economic calendar, focus will center on the preliminary U.S. business activity data for September. Forecasts indicate that S&P Global’s composite purchasing managers index for the month will align with August’s reading of 54.6. A level exceeding 50 signifies expansion. The manufacturing sector PMI is expected to decline slightly to 52.2 from 53.0, whereas the services industry gauge, which represents a significant portion of U.S. output, is anticipated to decrease marginally to 54.0 from 54.5.

Analysts indicated that “what should get attention” are several public appearances by Fed officials, including Chair Jerome Powell. Powell’s statements will follow the Fed’s decision to reduce interest rates by 25 basis points during its most recent policy meeting last week. However, the communication from the central bank regarding the future of borrowing costs has opened up discussions about the possibility of additional cuts prior to the conclusion of 2025, highlighting the importance of any insights Powell may offer concerning the policy direction. While certain Federal Reserve officials have supported the idea of refraining from further cuts for the remainder of the year, recently-confirmed Fed Governor Stephen Miran on Monday advocated for substantial reductions. Miran was selected for the position by President Donald Trump, who has consistently urged the Federal Reserve to swiftly reduce interest rates to support economic growth. Current market expectations indicate a probability of approximately 90% for a quarter-point reduction in the Fed’s target rate, moving from the existing range of 4% to 4.25%, at the upcoming central bank meeting in October. There exists approximately a 75% probability of an additional 25-basis point reduction at the subsequent meeting in December.

Oil prices experienced a decline due to ongoing concerns regarding oversupply, following a preliminary agreement between Iraq and the Kurdish regional governments to recommence operations of an oil pipeline. At 03:30, Brent futures experienced a decline of 0.4%, settling at $66.32 per barrel, while U.S. West Texas Intermediate crude futures decreased by 0.3%, reaching $62.08 per barrel. Both contracts are presently enduring a five-session decline. Iraq’s federal and Kurdish regional governments have come to an agreement with oil companies to restart crude exports through Turkey. This development could enable the resumption of approximately 230,000 barrels per day in exports, which have been halted since March 2023. In its latest monthly report, the International Energy Agency indicated that global oil supply is expected to increase at a faster pace this year, with a potential surplus projected to widen in 2026 as OPEC+ members boost production alongside rising supply from non-member sources.