US stock futures jumped on Thursday, setting the stage for fresh record highs as investors welcomed Micron's (MU) upbeat earnings and China's pledges of more stimulus while they waited to hear from Jerome Powell.
Dow Jones Industrial Average futures (YM=F) rose 0.4%, while S&P 500 futures (ES=F) added 0.8% after both gauges slipped back from all-time highs at the close. Contracts on the tech-heavy Nasdaq 100 (NQ=F) led the advance, surging 1.5% amid a sharp spike in Micron's shares.
Stocks are looking solidly positive again thanks to a double dose of optimism for the AI trade and for China's stimulus push, which could reverberate through US markets.
Nvidia (NVDA) supplier Micron lifted its next-quarter revenue forecast, citing robust demand for its memory chips used in AI data centers. Chip stocks Nvidia (NVDA), AMD (AMD), ASML (ASML), and STMicro (STM) rose in the wake of the earnings report.
Meanwhile, China's top leaders signaled they are pulling out the stops to revive its moribund economy with new pledges to lift fiscal spending, halt the property crisis and support the stock market. A big jump in mainland stocks set the CSI 300 (000300.SS) on track for its best week in a decade.
Helping the upbeat mood were growing expectations for another jumbo interest-rate cut from the Federal Reserve. Traders are pricing in 60% odds of a 0.5% move at its November meeting, versus 40% a week ago.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Investors are waiting for Fed Chair Powell's statement later to test those hopes, the highlight in a parade of Fed speakers on Thursday. Their comments will set the stage for Friday's highly anticipated reading on the PCE index, the inflation metric preferred by the Fed.
Data due Thursday could also prove a catalyst, given how closely the market is now watching for signs of stress in the economy. A reading on second quarter GDP and weekly jobless claims are on the docket.