U.S. stock futures are higher Wednesday morning after fresh economic data showed cooler-than-expected inflation and stronger-than-expected economic growth. August PCE inflation slowed to 3.4% YoY from 3.7% in July, while Q2 GDP was revised sharply higher to 2.2% from 1.5%, helping Treasury yields pull back and reducing pressure on rate-sensitive stocks. Market Snapshot Dow Futures: 51,863 | +0.31% S&P 500 Futures: 7,757.75 | +0.33% Nasdaq 100 Futures: 30,739.25 | +0.41% 10-Year Treasury: ~5.23% 30-Year Treasury: ~5.59% VIX: 15.81 | -1.43% Brent Crude: ~$97.65 | +1.55% Gold: ~$4,244 | +1.55% Bitcoin: ~$85.6K | +2.43% Key Market Drivers PCE Inflation Cools The August PCE inflation reading came in at 3.4% YoY, below the 3.7% pace in July and below the market expectation cited by Barron’s. The softer inflation reading has reduced expectations for an October Fed rate hike and pushed Treasury yields lower. U.S. GDP Revised Higher Q2 GDP growth was revised to 2.2% from 1.5%, showing stronger economic activity than previously estimated. The combination of stronger growth and softer inflation is an important market signal heading into the fourth quarter. Fed Rate Expectations Shift Markets have sharply reduced expectations for an October rate hike. CME-linked pricing cited by WSJ showed the probability falling to around 43% from 71% following comments from New York Fed President John Williams. Treasury Yields Remain Elevated The 10-year Treasury yield is around 5.23%, after reaching its highest closing level since 2022, while the 30-year yield remains around 5.59%. Although yields have pulled back, elevated long-term rates remain an important consideration for equities, particularly high-valuation growth stocks. AI & Semiconductor Stocks in Focus $MU — Key AI Memory Catalyst Micron reports fiscal-year earnings after the close today. Investors are watching the results and outlook for signs of continued strength in AI-related memory demand. The report could also provide read-throughs for other memory and AI infrastructure names. $HPE — $1.2B Vultr AI Order HPE announced a $1.2 billion order from Vultr for AMD Helios AI Rack by HPE systems at Vultr's U.S. data centers. It is HPE's first order for the new AMD Helios system, which combines AMD AI compute with purpose-built HPE Networking scale-up switching and software. HPE is also raising its FY27 Networking revenue-growth outlook to high-teens to low-20s percent and expects Networking revenue to grow at a high-teens CAGR from FY26 through FY29, highlighting networking as a major part of its AI infrastructure strategy. Stocks to Watch $BA — Boeing gained more than 3% premarket after securing a $20B+ U.S. Navy contract for its next-generation fighter. $NOC — Shares fell more than 3% premarket after Boeing won the Navy fighter contract. $HOOD — Robinhood gained more than 2% premarket after announcing new products, including an in-app AI agent. $MU — Reports earnings after the close; AI-driven memory demand and forward guidance will be closely watched. $HPE — In focus following the $1.2B Vultr AMD Helios order and upgraded long-term Networking outlook. Global Markets Global markets remain sensitive to Treasury yields, oil prices, Fed policy and Middle East developments. Reuters notes that the final day of Q3 comes after an unusually large rise in the 10-year Treasury yield during the quarter, while investors now reassess whether another Fed hike will be needed in October. Market Outlook The major themes heading into today's session are: Cooler PCE + Stronger GDP + Fed Rate Expectations + Treasury Yields + Oil + AI Infrastructure + Micron Earnings Bottom Line U.S. futures are higher as cooler PCE inflation and stronger GDP data ease some rate concerns. Treasury yields are pulling back, while AI and semiconductor stocks remain in focus ahead of Micron earnings. The key areas to watch today are Fed expectations, Treasury yields, crude oil, $MU, $HPE, $BA, $HOOD and broader AI infrastructure stocks.