US Pre-Market: Futures Firm After Chip Rout as Micron Earnings Headline the Day

US stock futures point modestly higher on Wednesday after Tuesday's semiconductor-led selloff cut the Nasdaq 2.21%. S&P 500 futures are up 0.15% and Nasdaq 100 futures up 0.31%, with Dow futures flat. The focal point comes after the close, when Micron (MU.US) reports earnings that test whether the AI-memory demand behind this year's chip rally is still building.

Where US futures stand

S&P 500 futures sit 0.15% higher, Nasdaq 100 futures 0.31% higher, Dow futures roughly flat and Russell 2000 futures up 0.20%. The tilt higher follows an overnight rebound in Asian chip names.

The cash market closed lower on Tuesday: the S&P 500 fell 1.44% to 7,365.46, the Nasdaq Composite dropped 2.21% to 25,587.04, the Dow eased 0.09% to 51,666.84 and the Russell 2000 lost 0.96% to 2,975.48. It was the S&P 500's weakest session in about two weeks, leaving the index up roughly 8% this year and about 5.5% below its June 2 record. The VIX sits near 19.3, easing slightly overnight. The US 10-year yield is near 4.49% and the dollar index is firmer at 101.66, up 0.24%.

What drove Tuesday's selloff

The selling started in Asia. South Korea's KOSPI fell about 10%, tripping a circuit breaker that halted trading, as SK Hynix and Samsung, which together make up roughly half the index, each dropped about 12%. The trigger was a report that SK Hynix is slowing its HBM4 memory expansion and shifting capacity toward conventional DRAM, where margins have recently overtaken high-bandwidth memory. That fed a broader unwind of a crowded AI and semiconductor trade after the KOSPI's roughly 95% surge this year.

The same selling hit US chips. Micron (MU.US) closed down 13.18% at $1,051.77, Sandisk (SNDK.US) fell 13.64%, ON Semiconductor (ON.US) lost 11.01%, Arm Holdings (ARM.US) fell 10.14%, Marvell (MRVL.US) dropped 9.36% and Applied Materials (AMAT.US) fell 8.48%. The VanEck Semiconductor ETF (SMH.US) fell 7.01% and Nvidia (NVDA.US) closed down 4.13% at $200.04. Outside chips, money moved toward software and defensive names: Microsoft (MSFT.US) rose 1.80% and Amazon (AMZN.US) added 0.57%, which is why the Dow held flat while the Nasdaq fell more than 2%.

Behind the selloff is a hawkish rates backdrop. New Federal Reserve Chair Kevin Warsh used his first press conference last week to stress getting inflation under control, which traders have read as a willingness to raise rates later this year rather than cut. Higher-multiple technology shares are the most sensitive to that shift.

Overnight: Asia rebounds, Europe softer

Korea bounced back. The KOSPI rose 3.26% on Wednesday and Samsung recovered about 7%, a sign Tuesday's plunge was a sharp unwind rather than the start of a sustained decline. Elsewhere in Asia, the Nikkei 225 eased 0.88%, while Hong Kong's Hang Seng added 0.33% and the Shanghai Composite edged up 0.11%.

European trading is softer in the US pre-market window: Germany's DAX is down 1.07%, the Euro Stoxx 50 is off 0.34%, while the UK's FTSE 100 is flat at plus 0.02% and France's CAC 40 is up 0.22%. WTI crude eased about 2.4% to near $71 after Washington signaled progress on an Iran deal and the lifting of the Strait of Hormuz blockade, taking some risk premium out of oil. Gold slipped about 2.1% to near $4,063.

Pre-market movers

Micron (MU.US) is recovering part of Tuesday's drop ahead of tonight's report, with memory peer Sandisk (SNDK.US) also firmer.

Alphabet (GOOGL.US) is modestly higher after S&P Dow Jones Indices said it will join the Dow Jones Industrial Average before Monday's open, replacing Verizon (VZ.US). The change adds artificial intelligence, cloud and advertising weight to the blue-chip index, where Alphabet joins Nvidia (NVDA.US), Amazon (AMZN.US), Apple (AAPL.US) and Microsoft (MSFT.US).

Micron earnings tonight

Micron (MU.US) reports fiscal third-quarter results after the close, the session's marquee event. Analysts broadly expect earnings near $20 a share on revenue around $35 billion, driven by high-bandwidth memory used in AI servers. Micron has said its HBM capacity is booked through 2026 and into early 2027, and its next-generation HBM4 is ramping at about twice the pace of the prior generation. The stock is up roughly 269% this year even after Tuesday's drop, so the result and management's comments on 2027 HBM4 allocation will set the tone for the memory group. The report follows Broadcom's (AVGO.US) decision early this month to leave its $100 billion AI-chip target unchanged, which had cooled AI sentiment.

US economic calendar today (ET)

• 9:45am: S&P Global flash PMIs for June (manufacturing and services).
• 10:00am: Richmond Fed Manufacturing Index.
• 1:00pm: 2-Year Note auction.
• After the close: Micron (MU.US) earnings. Later this week, the PCE inflation reading is the next major Fed input.

What to watch

Two questions set up the day for the memory and AI-hardware group: whether the overnight stabilization in chips holds into the US open, and how Micron's report lands tonight. The flash PMIs at 9:45am give a read on growth, and the 2-year auction will show how firmly the market is pricing the Fed's hawkish turn.

Context only, not financial advice. Track your own trades with Swingfolio.