By Peter Bergman (MoneyAmped.com)
U.S. stock futures indicated a downward trend on Thursday, as traders eagerly anticipated an upcoming presidential debate and important inflation data later in the week. Micron (NASDAQ:MU) shares take a nosedive in after-hours trading as the chipmaker’s current-quarter outlook falls short of the sky-high expectations. On the other hand, Levi Strauss’s sales for the second quarter fall short of expectations, causing a decline in the denim maker’s shares during after-hours trading.
Decline in Futures
U.S. stock futures slightly declined on Thursday as investors exercised caution prior to a highly-anticipated presidential debate and important inflation data that will be closely observed by Federal Reserve policymakers.
At 03:32 ET (07:32 GMT), the Dow futures contract experienced a slight decline of 50 points or 0.1%, while S&P 500 futures saw a decrease of 9 points or 0.2%. Similarly, Nasdaq 100 futures dropped by 43 points or 0.2%.
The major indices on Wall Street ended the day in positive territory after a volatile trading session on Wednesday. The S&P 500 index rose by 9 points or 0.2%, the Nasdaq Composite, which is focused on technology stocks, increased by 85 points or 0.5%, and the Dow Jones Industrial Average, consisting of well-established companies, edged up by 16 points or 0.04%.
Democratic President Joe Biden and his Republican challenger Donald Trump are set to engage in a televised debate on CNN this Thursday. Experts have stated that the occasion signifies the start of significant campaigning leading up to the U.S. presidential election in November.
On Friday, we can expect the release of the most recent update on the personal consumption expenditures price index. Universally recognized as the Federal Reserve’s favored measure of price increases, this number could influence market expectations regarding the central bank’s approach to potential interest rate cuts in the coming months.
Micron’s Shares Took a Tumble After Their Forecasts Failed to Meet the High Expectations of Investors
Shares in Micron plummeted during after-hours trading following the release of the company’s financial outlook for the current quarter. The outlook fell short of the extremely high expectations of investors, who had been fueled by the growing excitement surrounding artificial intelligence.
Micron, headquartered in Idaho, anticipates generating approximately $7.6 billion in revenue for its fiscal fourth quarter. This estimate aligns closely with the projected figure of $7.6 billion, as reported by LSEG data and cited by Reuters. In the three-month period ending on May 30th, Micron recorded a revenue of $6.81 billion, surpassing the projected amount of $6.66 billion.
Analysts expressed their desire for more robust guidance from the company, as they believe that high-bandwidth memory chips could be suitable for training the extensive language models that support AI applications. Micron has experienced significant gains in the recent surge of interest in AI, with its stock price more than doubling in the past year.
“Despite surpassing market expectations, Micron’s earnings and quarterly outlook were met with high anticipation,” analysts at Stifel noted in a message to clients.
After the market closed, the drop in Micron’s stock price had a negative impact on the shares of other semiconductor companies such as Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Intel (NASDAQ:INTC).
Levi Strauss Shares Decline Following Quarterly Sales That Fall Short of Expectations
Levi Strauss & Co, the renowned jeans manufacturer (NYSE:NYSE:LEVI), experienced a small shortfall in its fiscal second-quarter revenue, resulting in a decline of over 12% in the company’s shares during after-hours trading.
Revenue for the second quarter rose by 7.8% to $1.44 billion, falling slightly short of the projected $1.45 billion.
Levi Strauss experienced the impact of unfavorable foreign exchange conditions and sluggish demand at Docker’s, its khaki and chinos brand, according to Chief Financial Officer Harmit Singh.
Nevertheless, the company restated its yearly financial forecast and disclosed a boost of 8% in dividends to $0.13 cents per share, which signifies the initial upturn in six consecutive quarters.
Upcoming Biden-Trump Debate
Age is anticipated to play a significant role in Thursday’s debate featuring current U.S. President Joe Biden and former President Donald Trump.
Biden, at the age of 81, and Trump, at the age of 78, hold the distinction of being the most senior contenders in the history of U.S. presidential elections. Trump has claimed that Biden is not physically or mentally capable of holding office, while Biden has described Trump as “unstable” leading up to the event.
Given the divided national opinion polls, this debate presents an opportunity for both candidates to demonstrate their suitability to a group of undecided voters who could potentially sway the election results.
Crude Prices Slightly Decline
Oil prices experienced a slight decline on Thursday due to an unexpected increase in U.S. inventories, causing concerns about sluggish demand from the leading global oil consumer.
At 03:29 ET, the U.S. crude futures (WTI) were down 0.1% at $80.82 per barrel, while the Brent contract declined 0.1% to $84.43 a barrel.
At the end of Wednesday, the Energy Information Administration of the United States released data that revealed a significant increase of 3.6 million barrels in the petroleum product stocks of the country over the course of the previous week. The market was taken aback by this information because it had been anticipating a decrease of 2.6 million barrels, contrary to what was actually the case.
Even more alarming was a significant increase of 2.7 million barrels in gasoline inventories, suggesting that fuel consumption remained sluggish despite the arrival of the summer season, which typically sees an uptick in travel.
The increase in inventory raised concerns that the demand for fuel in the United States was slowing down due to persistent inflation and elevated interest rates.
