Stock Market Jitters: Tech Rally on Hold as Investors Eye Economic Data

US stock futures dipped on Thursday as investors grew cautious ahead of important economic data releases. This comes after chipmaker Micron's (MU) outlook disappointed investors looking for a stronger showing from the AI sector.

Tech Rally Loses Some Steam: The S&P 500 futures, which had been close to hitting a record high on Wednesday, fell around 0.2%. Futures for the Dow Jones and Nasdaq also saw similar declines.

Micron's Forecast Falls Short: Investors were hoping for a more robust sales forecast from Micron for the current quarter. While the forecast met expectations, it wasn't enough to keep the tech rally going strong. This has raised concerns that the recent market surge, driven by a handful of tech companies, might be losing momentum if these companies can't continue exceeding already high expectations.

AI Chip Stocks Under Pressure: Micron's stock price dropped nearly 6% in pre-market trading, dragging down other AI chip stocks like Nvidia (NVDA) which fell 1.6%. This rekindled worries about a repeat of last week's market sell-off.

Economic Data in Focus: Investors are now looking ahead to key economic reports due before the market opens, including updates on GDP and unemployment claims. These reports will set the stage for tomorrow's release of the PCE inflation data, which heavily influences the Federal Reserve's decisions on interest rates. A continued rise in jobless claims could solidify concerns about a weakening job market.

Inflation and the Presidential Debate: Inflation is also expected to be a major topic during tonight's first debate between President Biden and former President Trump.

Levi's Disappoints, Nike in Focus: Shares of Levi Strauss (LEVI) plunged over 15% in pre-market trading after the company reported lower-than-expected revenue for the second quarter. This raises concerns about consumer spending, especially in China. Investors will be closely watching Nike's (NKE) earnings report later today for further clues on consumer spending trends.

Why Levi's Struggles Matter: A deeper dive into Levi's disappointing quarter reveals two main reasons for the stock's plunge. First, sales in China, a major market, fell 10% compared to last year. This reflects a broader trend of Chinese consumers tightening their belts and spending less. Second, Levi's wholesale business, which sells to department stores, also saw a decline. The company doesn't expect this segment to recover until 2025. This raises questions about the future performance of the brand.