Nasdaq Futures Surge Amid Treasury Yield Spike and Strong Micron Earnings

The US stock market saw a mixed performance on Thursday as futures edged higher. The Dow Jones Industrial Average futures gained about 0.07%, while S&P 500 futures were relatively flat. However, Nasdaq 100 futures surged roughly 0.6% or 202 points.

The main driver behind the move was the surge in Treasury yields, which pushed the 10-year yield above 5.3% and the 30-year yield to around 5.7%, levels not seen since 2002. This increase in yields is more than just a reaction to the next Federal Reserve decision; investors are demanding higher compensation for inflation, government borrowing, and the financing requirements of the AI investment boom.

Micron's earnings report provided further confirmation that AI spending remains strong. The company reported fiscal fourth-quarter revenue of $54.23 billion and adjusted earnings of $33.42 a share, both above forecasts. It also guided to about $61.5 billion of revenue this quarter, versus estimates near $57 billion.

The semiconductor trade saw gains in pre-market trading, with Nvidia, AMD, Lam Research, and Applied Materials rising as investors interpreted Micron's numbers as a sign that AI infrastructure spending remains robust. Alphabet shares rose more than 2% after Google unveiled its new flagship AI model, Gemini 4 Argon.

The Federal Reserve's upcoming decision on interest rates has become less likely to be an October hike, with markets now assigning around 38% chance compared to 50% a day earlier and over 70% a week ago. The odds of a December rate increase have also been revised upwards.