US stocks gained in premarket trade Wednesday, looking to resume their record-setting rally as upbeat news from Alibaba (BABA) and Micron Technology (MU) fueled optimism around artificial intelligence.
Nasdaq 100 futures (NQ=F) climbed about 0.3%, while S&P 500 contracts (ES=F) edged 0.2% higher. Futures tied to the Dow Jones Industrial Average (YM=F), with its lighter tech weighting, added around 0.1%.
The rebound in tech sentiment follows Tuesday’s pause, when the major indexes snapped their winning streak amid weakness in the “Magnificent Seven” megacaps.
Alibaba shares surged more than 9% premarket after the Chinese giant vowed to lift AI spending beyond its $50 billion plan, with its CEO pointing to a global race toward $4 trillion in investment. Micron also offered encouragement for the AI trade, with stronger-than-expected quarterly results nudging its stock higher.
Still, questions over the path of US interest-rate cuts kept a lid on broader gains. Recent remarks from Federal Reserve officials highlighted growing division within the central bank, as cracks appear in the labor market outlook.
Fed Chair Jerome Powell reiterated Tuesday that policymakers will move cautiously on additional rate cuts, though he left the option for more easing on the table. He also noted that stock valuations remain “fairly high.”
Wall Street is now awaiting Friday’s release of the Fed’s preferred inflation measure, the Personal Consumption Expenditures index, for confirmation that price pressures aren’t threatening expectations for two more cuts this year. Ahead of that, fresh data on weekly mortgage applications and August home sales due Wednesday will give investors another read on housing and the broader economy.
