Equities: Tech rebound lifts futures – Deutsche Bank

Deutsche Bank strategists report that Micron’s strong revenue outlook has reignited hopes for AI-driven growth, boosting NASDAQ 100 and S&P 500 futures after recent losses. While the Mag 7 remains in correction territory, nearly two-thirds of S&P 500 constituents advanced and the equal-weighted index rose. They highlight a tentative recovery in US equities following three consecutive S&P 500 declines.

Micron-driven AI optimism supports rebound

"Markets are in a buoyant mood this morning, with Brent crude oil prices finally back at their pre-conflict levels."

"Alongside the oil price declines, the other positive story overnight came from Micron’s earnings after the US close. Their revenue outlook was at $50bn for the fiscal fourth quarter running through August, well above the $43.2bn analyst consensus."

"So that reignited hopes about AI-fuelled growth and helped to push back against fears we were in some kind of bubble. And in turn, Micron’s shares surged nearly 16% in after-hours trading, and futures on the NASDAQ 100 have also surged +1.77% overnight. So that tech strength has helped to lift US equities more broadly, with S&P 500 futures up +0.53%, finally pointing to a recovery after 3 consecutive losses for the index."

"This positivity has been clear in Asian markets overnight, with the Nikkei (+4.10%) and the KOSPI (+5.73%) both surging, alongside a strong gain for the CSI 300 (+1.61%). The main exception to that pattern has been the Hang Seng (-1.38%), which is currently on course for a one-year low."

"This backdrop helped equities to stabilise after their losses on Monday and Tuesday, with the S&P 500 (-0.10%) only posting a modest decline. That came as the Mag 7 (-0.82%) fell further into correction territory, having now fallen -11.6% since its May 28 peak, whilst the S&P 500’s energy sector (-1.73%) also struggled amid the decline in oil prices. But there was some positivity more broadly, with almost two-thirds of the S&P constituents higher on the day, leaving the equal-weighted S&P 500 up +0.71%. And over in Europe, the STOXX 600 (+0.08%) posted a marginal gain as well."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)