Oct 28 (Reuters) - Futures tied to the tech-heavy Nasdaq rose on Wednesday, buoyed by memory-chip stocks after SK Hynix's bumper results, with investors now looking to a slate of key earnings as the next test of AI trade, alongside the Federal Reserve's rate decision.
Memory chipmaker Micron Technology gained 4% in premarket trading after South Korean rival SK Hynix reported a more than sevenfold jump in quarterly profit. SK Hynix's US-listed shares jumped 7.8%.
Data storage firms Sandisk and Western
Digital rose 0.8% and 4.5%, respectively, while Seagate Technology was an outlier, down 3.7%, after reporting its first-quarter results.
The broader semiconductor segment was also trading higher, with Nvidia up 0.8%, AMD climbing 1.5% and Marvell Technology adding 1.7%.
Alphabet advanced 1.2% following a media report that OpenAI plans to buy Google's AI chips.
At 04:53 a.m. ET, Dow E-minis were down 88 points, or 0.17%, S&P 500 E-minis were up 7.25 points, or 0.1%, and Nasdaq 100 E-minis were up 122 points, or 0.41%.
The Nasdaq has gained around 2% so far this week, after a bruising first half of the month, as sentiment toward AI improved following Anthropic's US IPO filing on Monday.
The focus now shifts to quarterly results from hyperscalers Microsoft and Alphabet, due after markets close on Wednesday, with both companies expected to report accelerating cloud growth.
Investors will closely scrutinize their capital expenditure plans for signs that massive AI investments are generating returns, as concerns over the viability of debt-funded spending amid rising borrowing costs continue to weigh on the sector.
"Demand remains strong, but with capex still accelerating, the market is increasingly focused on what all that spending ultimately produces," said Jake Behan, head of capital markets at Direxion.
"The more skeptical the market gets about AI returns, the harder it becomes to justify today's pace of spending."
Amazon.com and chipmaker Intel are expected to report later this week.
Investors will parse results from power equipment maker GE Vernova, drugmaker Biogen and medical device maker Boston Scientific before market opens on Wednesday.
FED DECISION ALSO IN FOCUS
The US Federal Reserve's interest rate decision is due at 2 p.m. ET on Wednesday, with market consensus widely tilted toward a pause following last month's hike.
Market expectations, however, remain hawkish as traders see at least three 25-basis-point increases by late 2027, according to data compiled by LSEG. Pricing has gone up as key inflation metrics remain elevated due to rising energy costs amid the ongoing conflict in the Middle East.
Those expectations could be tested on Thursday by September's Personal Consumption Expenditures report, the Fed's preferred inflation gauge. Third-quarter GDP, expected to show 3.2% growth, is also due this week.
Among other stock movers, Robinhood Markets dropped 8% after the trading platform missed Wall Street estimates for third-quarter profit, while Visa shares dipped 1.7% after the payment processing giant reported fourth-quarter results.
(Reporting by Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar)
