* Futures: Dow down 0.28%, S&P up 0.23%, Nasdaq up 0.24%
* Seagate ( STX ) gains after forecasting revenue, profit above
estimates
* Ford rises after lifting FY profit outlook
* Fed verdict due at 2:00 pm ET
(Updates prices throughout; adds analyst comment)
By Johann M Cherian and Ragini Mathur
July 29 (Reuters) - S&P 500 and Nasdaq futures inched higher
on Wednesday as investors awaited the Federal Reserve's monetary
policy verdict against a backdrop of simmering Middle East
tensions, while chip stocks struggled ahead of Big Tech earnings
later this week.
Global markets have been volatile this month as investors
questioned the sustainability of the AI spending boom after
signs that major U.S. companies were deepening a web of
AI-linked investments and continuing to funnel billions into the
technology at the expense of free cash flow.
The scrutiny comes as competition from China heats up, both
in the race to develop advanced chips and as Chinese firms roll
out cheaper AI models. On Wednesday, the rout extended from Asia
through Europe after South Korean chipmaker SK Hynix's ( SKHY )
bumper quarterly results fell short of lofty
investor expectations.
U.S.-listed shares of the company dipped 1.2% in
premarket trading, while other chip stocks seesawed in volatile
trade. Nvidia ( NVDA ) inched up 0.1%, Intel ( INTC ) climbed
1.4%, Applied Materials ( AMAT ) dropped 3.2% and Sandisk ( SNDK )
edged down 0.3%.
Data storage provider Seagate Technology ( STX ) was a
bright spot, climbing 5.7% after forecasting quarterly results
above estimates. KLA Corp ( KLAC ), meanwhile, forecast
stronger-than-expected first-quarter revenue, but its shares
fell 7.5% as investors sought more.
Results from Microsoft ( MSFT ), Meta, Amazon.com ( AMZN )
and Apple ( AAPL ) later this week will be closely
watched for signs that their billion-dollar AI investments were
boosting earnings. Shares of the companies were marginally
higher.
At 7:09 a.m. ET, Dow E-minis were down 146 points,
or 0.28%, and S&P 500 E-minis were up 17.5 points, or
0.23%. Nasdaq 100 E-minis were up 67 points, or 0.24%.
Tech concerns have pushed the Nasdaq to a
three-month low, prompting investors to focus on other areas of
the market such as consumer staples and healthcare
. The blue-chip Dow is also at a two-week high.
FED IN FOCUS
The Fed will announce its monetary policy verdict at 2:00
p.m. ET against the backdrop of crude prices soaring by
4.4% to $87.75 a barrel, as tensions in the Middle East flared
up.
"With oil prices remaining volatile and inflation
expectations at risk of de-anchoring, we don't expect the Fed
can hold with the same conviction it's shown recently," said
Michael McGowan, chief investment strategist at Pathstone.
"If the Fed holds, potential dissents in favor of hikes
could be an interesting tell."
Traders see a 38% chance of a rate hike, according to LSEG
data, following a report showing that price pressures eased in
the prior month.
Still, markets expect rates to rise by at least 25 basis
points by year-end, as tariff costs and higher energy prices
feed into inflation.
Markets will scrutinize Chairman Kevin Warsh's comments
following the decision to gauge his tone on monetary policy at a
time when he has said that the central bank will avoid offering
any guidance on interest rates.
Ford Motor ( F ) gained 5.5% after raising its annual profit
outlook for a second time this year.
The second-quarter earnings season has reflected healthy
corporate performance, with 85.2% of the 169 S&P 500 companies
that have reported earnings having surpassed expectations,
LSEG-compiled data showed. Historically, 68% of companies have
achieved that feat.