US stock futures higher; falling yields, upbeat Mucron outlook help

Investing.com -- U.S. stock futures rose Thursday, bouncing after the previous session’s sharp retreat, helped by falling Treasury yields and a healthy outlook from chipmaker Micron.

By 06:35 ET (11:35 GMT), the Dow Futures contract was up 160 points, or 0.4%, S&P 500 Futures traded 20 points, or 0.4%, higher and Nasdaq 100 Futures climbed 110 points, or 0.7%.

The main Wall Street indices closed sharply lower Wednesday, with the tech heavy Nasdaq Composite dropping 1.5% and the blue chip Dow Jones Industrial Average falling 1.3%, breaking nine day winning streaks for both. The broad-based S&P 500 fell 1.5%, its worst day since September.

That said, all three averages are still on course for strong gains in December as well as this year amid growing optimism that the Federal Reserve will authorise interest rate cuts in the new year.

Falling yields boost confidence

Helping the tone Thursday has been a fall in U.S. yields, with the benchmark 10-year U.S. Treasury yield falling to a seven-month low of 3.847% overnight, as bets that the Fed will move to slash rates from over two-decade highs in the spring continue to grow.

According to Investing.com's Fed Rate Monitor Tool, there is a more than 68% chance that the Fed will lower borrowing costs by 25 basis points as early as March.

Philadelphia Federal Reserve President Patrick Harker added to those expectations on Wednesday, as he signaled an openness to lowering short-term borrowing costs.

"It's important that we start to move rates down," he said in an interview, adding that "we don't have to do it too fast, we're not going to do it right away, it's going to take some time."

Micron offers confident outlook

Adding to the positive outlook was a healthy outlook from Micron Technology (NASDAQ: MU), with the chipmaker forecasting quarterly revenue above market estimates on Wednesday, on signs of memory chip recovery in 2024 after one of the most significant downturns in years.

Micron’s results are closely watched, as it usually reports ahead of companies that report numbers in January, and its memory products can be a signal for demand in other semiconductor markets.

Elsewhere, quarterly results are scheduled from Nike (NYSE: NKE) after the close, and its outlook will be studied for news of consumer demand in the vital holiday season.

Warner Bros Discovery (NASDAQ: WBD) and Paramount Global (NASDAQ: PARA) have discussed a potential tie-up, according to reports, that would bring together two of the world's largest media companies/

Crowded economic data slate

There are a number of data releases due Thursday, including weekly jobless claims, the Philadelphia Fed manufacturing index, and most importantly the latest reading of quarterly gross domestic product growth.

However, of most interest will be the core Personal Consumption Expenditures price index, the Fed’s favorite measure of inflation, on Friday, which could show whether inflation has slowed enough for the Fed to begin easing policy next year.

Oil prices rise despite increasing API stockpiles

Oil prices edged lower Thursday following a surprise increase in U.S. crude inventories, although losses were tempered by continued jitters over global trade disruptions due to tensions in the Middle East.

By 06:35 ET, the U.S. crude futures traded 0.4% lower at $73.89 a barrel, while the Brent contract dropped 0.4% to $79.37 a barrel.

The U.S. Energy Information Administration announced on Wednesday that U.S. crude inventories rose by 2.9 million barrels last week, compared with expectations for a 2.3 million barrel drop, raising concerns about demand at the world’s largest consumer.

EIA also said U.S. crude output rose to a record 13.3 million barrels per day last week, up from the prior all-time high of 13.2 million barrels.

Crude prices climbed sharply this week as shipping operators announced plans to avoid the Suez Canal as a result of attacks by the Iran-backed Houthi group on vessels in the Red Sea, potentially disrupting oil supplies to the important Asian market.

Additionally, gold futures fell 0.1% to $2,046.65/oz, while EUR/USD traded 0.4% higher at 1.0983.

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