By Shashwat Chauhan and Utkarsh Hathi
Oct 28 (Reuters) - US stocks were on track to open higher on Wednesday as memory-chip firms climbed after SK Hynix's bumper results, while investors looked to upcoming key corporate earnings as the next test of AI trade, alongside the Federal Reserve's rate decision.
Memory chipmaker Micron Technology gained 3.6% 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 7.5%.
Data storage firms Sandisk and Western Digital rose 4.1% and 1.4%, respectively, while Seagate Technology was an outlier, down 2.5%, after reporting its first-quarter results.
The broader semiconductor segment was also trading higher, with Nvidia up 0.9%, while AMD and Marvell Technology each added 1.5%.
Alphabet advanced 1.3% following a media report that OpenAI plans to buy Google's AI chips.
At 08:16 a.m. ET, Dow E-minis were down 36 points, or 0.07%, S&P 500 E-minis were up 16.25 points, or 0.21%, and Nasdaq 100 E-minis were up 123.5 points, or 0.41%.
The Nasdaq has gained around 2% so far this week, following a bruising first half of the month, as sentiment toward AI improved after Anthropic revealed its 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 among major technology companies that are expected to report later this week.
On the day, Vertiv jumped 17% after the digital infrastructure provider raised full-year profit and revenue forecasts, while also topping third-quarter expectations.
Robinhood Markets dropped 6.5% after the trading platform missed Wall Street estimates for third-quarter profit, while payment processing giant Visa dipped 1.6% following its fourth-quarter results.
Looking ahead, the US Federal Reserve's interest-rate decision is due at 2 p.m. ET on Wednesday, with the 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 LSEG data, as persistently high inflation due to rising energy costs tied to the Middle East conflict bolster the case for tighter monetary policy.
September's Personal Consumption Expenditures report, the Fed's preferred inflation gauge, could test those bets on Thursday. Third-quarter GDP, which is expected to show 3.2% growth, is also due this week.
(Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Editing by Shilpi Majumdar)
