A look at the day ahead in U.S. and global markets from Mike

Dolan

With quarter-end fast approaching, tech excitement returned to

Wall Street overnight with another AI-driven earnings beat from

Micron Technology ( MU ), while China's stocks surged

anew after this week's monetary easing blitz.

The artificial intelligence theme had gone a bit flat in

recent weeks as attention switched to aggressive Federal Reserve

interest rate cuts - but Micron added fresh fizz overnight.

Its stock surged 14% after the bell as it revealed the

highest quarterly revenue growth in more than a decade on the

back of booming demand for its AI-related memory chips.

With investor attention turning to the upcoming

third-quarter earnings season, Micron's results typically set

the tone for the chip sector as it reports ahead of peers and

serves a broad client base spanning PCs, data centers and

smartphone industries.

And that's lifted Wall Street futures again after a downbeat

Wednesday, with Nasdaq futures up more than 1% ahead of

Thursday's open.

Perhaps due to some erratic flows related to the end of the

third quarter, global market moves have turned somewhat

scattergun.

But the dominant themes remain: worldwide interest rate cuts

and a U.S. 'soft landing', disinflation encouraged by a fresh

oil price plunge, China's latest stimulus push, and the looming

U.S. election.

The Swiss National Bank became the latest major central bank

to cut interest rates - its third cut of the year, knocking

another quarter point off its policy rate to just 1% and

flagging further easing ahead. The franc weathered the

expected move well against a generally firmed dollar index

.

Disinflation pressures mounted in the energy markets again

on Thursday, with crude oil prices sliding on a Financial Times

report that Saudi Arabia is preparing to abandon its unofficial

price target of $100 a barrel as it prepares to increase output.

U.S. crude prices slumped back below $70 per barrel,

magnifying year-on-year declines to some 25% - a likely powerful

downward force on headline annual inflation rates throughout

September.

Fed Governor Adriana Kugler kept U.S. easing hopes on the

boil overnight too. While insisting that the inflation target

was not yet in the bag and further moves were "data dependent",

she added that rapid disinflation meant the Fed needed to cut

just to keep the level of restrictiveness in policy steady.

China's market revival this week also took a new leg higher,

with another 4%-plus leap in both mainland Chinese shares

and in Hong Kong.

Led by gains in the embattled property sector, the latest

spur came after Beijing pledged more policy measures on growth

just days after announcing a series of big rate cuts and funding

for the markets.

State media, citing a Politburo meeting on the economic

situation, reported that China would step up counter-cyclical

adjustments of fiscal and monetary policy and strive to achieve

full-year economic and social development targets.

Reuters sources said China plans to issue special sovereign

bonds worth about 2 trillion yuan ($284.43 billion) this year as

part of a fresh fiscal stimulus.

The offshore yuan continued to test 7 per dollar,

close to its best levels since May of last year.

Back on Wall Street, Wednesday's stalling near record highs

looks set to be a temporary setback, with the tech news

overnight adding to upbeat new homes sales during the session

that has aided economic 'soft landing' hopes.

Super-sensitive soundings from the labor market are back on

the slate on Thursday with weekly jobless readings, and the

August PCE inflation report - which Fed governor Christopher

Waller said last week was one decisive factor in the outsize

rate cut - is due on Friday.

Treasury yields held up on Thursday amid this week's series

of auctions, with the two-year hovering around 3.55% and the

10-year yield at 3.77%. The newly positive 2-10 year yield curve

gap held just above 20 basis points.

The U.S. Congress passed a stopgap bill on Wednesday to

avert a partial government shutdown beginning next week, even as

a large number of House Republicans revolted against their

leadership for failing to achieve new federal spending cuts.

The measure will maintain the government's current level of

roughly $1.2 trillion in annual discretionary funding through

Dec. 20, avoiding the furloughing of thousands of federal

workers and the shutdown of a wide swath of government services

just weeks before the Nov. 5 election.

U.S. Vice President Kamala Harris said on Wednesday she

would offer tax credits to domestic manufacturers and invest in

sectors that will "define the next century", as she detailed her

economic plan to boost the U.S. middle class.

Key developments that should provide more direction to U.S.

markets later on Thursday:

* U.S. weekly jobless claims, August pending home sales, August

durables goods orders, Q2 GDP revision, Kansas City Fed Sept

business survey

* Mexico central bank policy decision

* Federal Reserve Board Governor Michelle Bowman and Lisa Cook

both speak, New York Fed President John Williams, Boston Fed

chief Susan Collins, Minneapolis Fed chief Neel Kashkari and Fed

Vice Chair for Supervision Michael Barr all speak; European

Central Bank President Christine Lagarde and ECB board members

Luis de Guindos and Isabel Schnabel all speak

* US corporate earnings: Costco, Carmax ( KMX ), Jabil ( JBL ), Accenture ( ACN )

* US Treasury sells $44 billion of 7-year notes, auctions $90

billion of 4-week bills

(By Mike Dolan, editing by Gareth Jones

[email protected])