U.S. stock futures were uneven on Wednesday morning, reflecting investor caution following a sharp pullback in technology shares. The Nasdaq was set to open lower after chipmaker Advanced Micro Devices (AMD) reported weaker-than-expected quarterly earnings, adding to broader concerns about slowing demand in the semiconductor sector. Meanwhile, traders awaited new signals on monetary policy and inflation that could shape sentiment in the coming days.

Tech Sector Weakens After AMD’s Earnings

AMD shares fell in pre-market trading after the company’s earnings report failed to meet investor expectations on both revenue and forward guidance. The chipmaker’s results underscored growing challenges in the PC and data center segments, where softer enterprise spending and rising competition have pressured margins. The miss weighed on the broader semiconductor group, dragging Nasdaq futures lower.

Other major tech names, including Nvidia, Intel, and Micron, also saw pre-market declines, contributing to renewed volatility in the sector. Analysts noted that while chip demand remains structurally strong in areas like AI and cloud computing, near-term inventory corrections and tightening corporate budgets could continue to restrain growth through the fourth quarter.

Dow and S&P 500 Hold Steadier Amid Sector Rotation

In contrast, Dow Jones Industrial Average futures hovered near flat as investors rotated into defensive sectors such as healthcare and consumer staples. The S&P 500 showed modest resilience, supported by energy and utility stocks, which benefited from stable commodity prices and safe-haven demand.

Market strategists suggested that the recent tech correction could spark short-term volatility but might not derail the broader equity rally if macro conditions remain supportive. The 10-year Treasury yield eased slightly to around 4.55%, providing some relief to equity valuations after recent spikes in bond yields pressured risk assets.

Investors Eye Inflation Data and Fed Commentary

Attention now turns to upcoming economic releases, including fresh inflation readings and labor market data later in the week. Federal Reserve officials are scheduled to speak over the next two days, and their tone will be closely monitored for hints about the central bank’s stance on rate cuts heading into 2025.

Recent data have suggested that inflation is moderating but remains above the Fed’s long-term target, keeping policymakers cautious. Traders are pricing in a roughly 60% probability of a rate cut by the March meeting, according to futures markets, though expectations remain fluid amid mixed economic signals.

Outlook: Volatility Ahead as Markets Digest Tech Weakness

Looking forward, market direction will likely hinge on whether the current tech sell-off deepens or stabilizes. Earnings updates from other major chipmakers and technology companies will be closely watched for confirmation of broader sector trends. Investors are also monitoring macro indicators to gauge whether slowing growth could offset inflation risks and prompt a policy shift from the Federal Reserve.

For now, sentiment remains fragile, with traders balancing optimism about a soft economic landing against lingering fears of a deeper corporate earnings slowdown. A sustained rebound in tech stocks may require clearer signs of stabilization in chip demand and confidence that rate policy will remain supportive in the first half of next year.