Canadian equities appeared set to open higher on Thursday after strong corporate results in the technology sector rekindled interest in the artificial intelligence trade. The boost follows a down session on Wednesday when the benchmark S&P/TSX Composite closed down 191.29 points, or 0.55%, at 34,736.09, and the S&P/TSX 60 slid 0.30% to 2,049.68.
Before the market open, S&P/TSX 60 Futures were trading up 0.39% at C$2,062.4, reflecting tentative optimism among investors heading into the North American trading day.
Micron’s results and guidance reignite AI-driven chip buying
Memory-chip maker Micron Technology Inc (MU) delivered quarterly results that far exceeded expectations and provided guidance that materially topped analyst forecasts, lifting its stock sharply in pre-market trading. Micron reported adjusted earnings of $25.11 per share for the fiscal third quarter ended May 28 on record revenue of $41.46 billion, outpacing analyst estimates of $20.49 per share and $35.69 billion in revenue.
The company projected fiscal fourth-quarter revenue of $49 billion to $51 billion and earnings per share of $30.00 to $32.00, well above consensus estimates of $43.24 billion and $25.31 per share. Management also forecast an 86% gross margin for the upcoming quarter and said on the post-earnings call that memory supply constraints showed little sign of easing. Micron shares rose roughly 18.5% in pre-market trading as investors reacted to the combination of stronger-than-expected results and aggressive forward guidance.
U.S. futures and major indexes follow suit
U.S. stock index futures climbed markedly in Thursday pre-market trade after the strong corporate outlooks from chip-related companies. Nasdaq 100 Futures jumped 2.32% to 30,199.00, S&P 500 Futures gained 0.81% to 7,488.25, and Dow Jones Futures inched up 0.27% to 52,422.00. The futures gains came after a mostly negative session on Wall Street earlier in the week when technology shares had experienced significant weakness. The upbeat guidance from Micron and other chipmakers helped reverse that momentum and restore some confidence among tech investors.
Gold modestly recovers from multi-month lows
Gold staged a small rebound on Thursday, clawing back some losses while still hovering close to its lowest levels in more than seven months. A firm U.S. dollar and growing expectations of additional Federal Reserve tightening continued to weigh on demand for non-yielding bullion, even as the metal advanced slightly in electronic trading. Gold Futures rose 0.51% to $4,029.27 per ounce, while XAU/USD moved up 0.35% to $4,013.12.
Crude prices slip on expected Middle East supply recovery
Oil prices fell on Thursday to levels last seen before the onset of the Iran war as market participants priced in expectations of rising supply from the Middle East. Both major crude benchmarks reached their weakest levels since February 27 amid those supply expectations. U.S. Energy Secretary Chris Wright said at a forum that flows through the Strait of Hormuz were near pre-war levels, with at least 20 million barrels having exited the strait in the past 24 hours. He added that a full return to normalcy would take a few weeks because the strait still needs to be demined.
In reaction, Crude Oil WTI Futures fell 1.07% to $69.59 per barrel, and Brent Oil Futures slipped 0.83% to $73.26 per barrel, as traders weighed the potential for increased export volumes against ongoing geopolitical uncertainty.
What this means for markets
The combination of blowout results and strong guidance from a major memory-chip supplier helped revive the AI-related technology trade, lifting U.S. futures and supporting a modestly firmer tone in Canadian pre-market indicators. At the same time, commodity markets diverged: gold posted a small bounce from multimonth lows amid strong dollar and rate concerns, while crude retreated on signs that Middle East flows may be recovering.
Investors will be watching whether the positive momentum in technology and chipmaking stocks extends into regular trading hours and how commodity markets digest the mixed signals from monetary policy expectations and Middle East supply restoration.