U.S. equity futures were mostly higher on Thursday, supported by upbeat guidance from semiconductor group Micron (NASDAQ:MU), although investor sentiment remains sensitive ahead of the release of key U.S. inflation figures. In Europe, several central banks are holding policy meetings, with the Bank of England expected to stand out as the only one to cut interest rates.

Micron lifts futures as markets await CPI

U.S. stock futures edged higher in early trading, led by gains in technology names after Micron delivered a strong update, while traders positioned cautiously ahead of the latest U.S. consumer price data.

At around 03:55 ET, S&P 500 futures were up about 18 points, while Nasdaq 100 futures advanced roughly 0.6%. Dow futures lagged, slipping around 0.1%.

Micron’s results helped stabilise sentiment following recent disappointments from other technology heavyweights, including Broadcom (NASDAQ:AVGO) and Oracle (NYSE:ORCL). Even so, the broader market remains under pressure, with both the S&P 500 and the Dow posting four straight sessions of losses.

The Nasdaq Composite underperformed in the previous session, sliding 1.8%, weighed down by a sharp drop in Oracle shares. The decline followed a Financial Times report that a key investor had withdrawn from a planned $10 billion data centre project in Michigan.

Attention now turns to the U.S. inflation report, which is expected to provide further clues on the Federal Reserve’s policy direction for next year.

U.S. consumer prices in focus

Recent economic releases have pointed to a cooling U.S. labour market, with last week’s employment report showing the jobless rate at a four-year high of 4.6%.

Thursday’s CPI data brings the inflation side of the Fed’s dual mandate back into focus. While policymakers have recently placed greater emphasis on labour market conditions, inflation remains a critical variable.

Both headline and core CPI are forecast to rise 3.0% year on year, matching the pace seen in the most recent inflation release from September. More broadly, progress toward the Fed’s 2% inflation target has stalled for over a year, with annual CPI readings largely stuck in the 2.3% to 3.0% range.

Micron highlights robust chip demand

Market confidence was shaken last week by underwhelming earnings updates from several AI-linked companies. Micron Technology has helped reverse some of that negativity after forecasting a strong second quarter following its earnings release on Wednesday.

The company is benefiting from solid demand from data centres, driven by heavy investment from major cloud service providers. This momentum is expected to persist, with Micron chief executive Sanjay Mehrotra telling investors that the firm is likely to meet only half to two-thirds of demand from some key customers through 2026.

Micron’s products are used across a wide range of applications, from servers and personal computers to vehicles and smartphones. The company is also a major supplier of high-bandwidth memory chips, which are critical for training and deploying generative artificial intelligence models.

Bank of England expected to cut rates

Several European central banks are delivering policy decisions on Thursday, but the Bank of England is expected to be the main focus for markets.

The European Central Bank is widely anticipated to keep rates unchanged at 2%, potentially alongside improved growth forecasts. Sweden’s Riksbank and Norway’s Norges Bank are also expected to leave policy settings unchanged at 1.75% and 4% respectively.

In contrast, the BoE is expected to lower interest rates by 25 basis points to 3.75%, from 4.0%, following a sharp slowdown in inflation and softer economic data. UK inflation data released on Wednesday reinforced expectations of an imminent rate cut, although at 3.2% it remains the highest among G7 economies.

Markets are currently pricing in just one additional BoE rate cut in 2026, likely by late April, though expectations for a second cut increased after the November inflation figures.

Oil prices rise after Venezuela move

Oil prices pushed higher after U.S. President Donald Trump ordered a blockade of sanctioned oil tankers entering and leaving Venezuela, raising concerns about potential supply disruptions.

Brent crude futures climbed 0.7% to $60.08 a barrel, while U.S. West Texas Intermediate gained 0.8% to $56.24.

The move followed Tuesday’s announcement that tankers carrying Venezuelan oil already under U.S. sanctions would be targeted, increasing pressure on President Nicolas Maduro’s government.

“The key questions are, first, how effective this blockade will be, and second, how long it will last. This will be important in determining the impact on the oil market,” ING analysts said in a note.

Despite the rebound, oil prices remain on track for weekly declines of close to 2%, weighed down by expectations of oversupply and the possibility of a peace agreement in Ukraine. U.S. crude prices are down around 21% this year, marking their weakest annual performance since 2018, while Brent has fallen nearly 20%, its worst showing since 2020.

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