Weekly Preview: Micron (MU.US) Earnings to Test the Mettle of AI Infrastructure, OpenAI and White House AI Talks in Resonance, PCE and Nonfarm Payrolls to Set the Tone for October Rates

Last week, the market was dominated by two major headlines. First, Meta (META.US) unveiled its Muse agent and accompanying AI hardware Charm at the Connect conference, with the related products quickly topping Apple Inc. (AAPL.US) App Store and Alphabet Inc. Class C (GOOGL.US) Play Store, becoming the most closely watched new variable in the AI application layer. Second, China's head of state made a state visit to the United States, with investors closely assessing its potential impact on the AI trading landscape and relations between the world's two largest economies. Despite the dense headlines and intersecting market forces, U.S. equities ended last week broadly flat, with major indices avoiding sharp swings on these events. Turning to this week, the market's focus will shift from politics and product launches to earnings and macroeconomic data. After the U.S. market close on Wednesday, memory chip giant Micron Technology, Inc. (MU.US) will report fourth-quarter results, seen as a key test of whether the AI infrastructure trade can continue. Over the past two weeks, AI infrastructure-related trades have wavered, and memory chips have become one of the most prominent bottlenecks in AI compute expansion, with investors set to focus on finding evidence of sustained strong memory demand. Beyond that, OpenAI is expected to preview GPT-6 Cyber and launch hosted agent-related products at its DevDay in San Francisco on Tuesday; U.S. President Trump, House Speaker Mike Johnson and tech CEOs will meet on September 29 local time to discuss AI. Together, the three form a triple validation of the AI tradefrom models, to regulation, to profitability. On the macro front, this is a classic "jobs and inflation week." The Fed's preferred inflation gauge, PCE, will be released on Wednesday, and the September nonfarm payrolls report will follow on Friday. Together they will determine how the market prices the Fed's October meeting and even the 2026 policy path. In addition, JOLTS job openings, the ISM manufacturing index, euro-area CPI, and the RBA decision will also vie for market attention. Meta's Muse Moment Last week, Meta's Connect conference became the focus for investors. Meta CEO Mark Zuckerberg outlined the company's future vision, with Muse at its core. The social giant's new AI agent quickly shot to the top of Apple Inc.'s App Store and Alphabet Inc. Class C's Play Store, with Zuckerberg saying millions of people have already used it. During the conference, Meta Chief AI Officer Alexandr Wang demonstrated multiple use cases for Muse, from everyday tasks like scheduling meetings to more complex operations such as negotiating better rates for cable TV service and completing purchases across multiple services. Meta also brought Muse to its next-generation Meta VR glasses, letting users talk with the agent's digital avatar; it also launched Muse Charm, a handheld dedicated device that lets users interact with the Muse agent without a smartphone or smart glasses. The company said it will monetize by taking a small cut of transactions completed through the Muse agent. This week the market will watch whether Meta's momentum can continue. If Meta is to win over a broader user base beyond early adopters and AI enthusiasts, it must convince people it takes privacy and security seriously. Muse has reportedly been found to have a security vulnerability that could affect user data and the safety of virtual environments. In response, Meta is preparing to strengthen risk warnings and will add more prominent alerts. William Blair analyst Ralph Schackart noted that as consumers increasingly trust AI systems with sensitive tasks such as financial information, communications, calendars and purchasing decisions, trust could become an important competitive differentiator. Micron, OpenAI and Trump's AI Meeting Micron Technology, Inc. will report Q4 earnings after the close on Wednesday. As the leading U.S. maker of DRAM and NAND memory, Micron is seen as one of the most direct beneficiaries of AI memory demand. Investors will look for evidence of whether the AI-driven memory boom can lift revenue, margins and long-term demand visibility to another level. The company previously disclosed record third-quarter revenue of $41.46 billion, up 346% year over year; non-GAAP gross margin widened to 84.9% from 74.9% in the prior quarter. HBM4 has entered mass production on major customer platforms, and the company is also shipping qualification samples to multiple customers. For FQ4, management guided revenue of $50 billion $1 billion, non-GAAP gross margin of about 86%, and non-GAAP earnings per share of $31 $1, implying AI infrastructure demand continues to drive higher-value memory content. Micron recently also announced management changes: Manish Bhatia was promoted to president and chief operating officer, and Scott DeBoer to president and chief technology and product officer, to strengthen the leadership structure during capacity expansion and product development. Micron said it has signed 16 strategic customer agreements, 14 of which represent about $100 billion in minimum cumulative revenue over the contract period. These agreements cover DRAM, HBM and NAND across data center, consumer, automotive and industrial markets. Wall Street currently maintains a "Strong Buy" consensus rating on the stock. Joining Micron's earnings this week is OpenAI's developer conference (DevDay 2026). The AI giant is expected to preview a cybersecurity-focused model, GPT-6 Cyber, at Tuesday's event and launch new tools to help customers deploy it more safely and automatically. According to multiple people familiar with the matter, GPT-6 Cyber is OpenAI's fourth cybersecurity model this year and may make its official debut at DevDay, alongside plans to launch a dozen or more other products. Limited customers have already received alpha access to GPT-6 Cyber through OpenAI's application-based cybersecurity program, Daybreak Red. The launch comes as the AI industry finds itself in an extremely complex situation. OpenAI CEO Sam Altman and rival Anthropic's CEO joined industry leaders earlier this month in calling for slowing AI development and strengthening safety measures. Cybersecurity is becoming one of AI's fastest-growing markets, with tech companies racing to develop tools to counter threats and restrain out-of-control AI agents. OpenAI has warned that Astra, its GPT-6 flagship model, sometimes tries to evade human oversight; Australia also said last Thursday that an OpenAI agent breached a government health data portal in June. Those events make OpenAI's upcoming safe-deployment products even more closely watched. On the policy front, U.S. President Trump, Republican House Speaker Mike Johnson and tech CEOs will hold an AI meeting on September 29. Leading global AI companies have warned that AI poses risks to humanity and called for government cooperation to manage the increasingly powerful technology, while governments struggle to keep up with AI's rapid evolution in regulation. The U.S. and China, the two dominant forces in AI development, have taken different paths: Trump believes the U.S. does not need new AI-specific regulation; China imposes rules on AI algorithms and training data, including requiring clear labeling of AI-generated content. In his address to the UN General Assembly general debate, Trump said he "rejects any attempt to build globalist schemes to control AI," calling the technology amazing but saying the U.S. will remain cautious. PCE and Nonfarm Payrolls: A Double Test of Inflation and Jobs On the macroeconomic front, the core of this week is PCE inflation and the September nonfarm payrolls report. The Fed's preferred inflation gaugethe August PCE price indexwill be released on September 30. Compiled data show the market expects August PCE to rise 3.8% year over year, accelerating from 3.7% previously; core PCE, excluding food and energy, is expected to rise to 3.4% from 3.3%. Real personal consumption, adjusted for inflation, is expected to rise 0.5% month over month, the largest single-month gain in more than a year. If consumer demand stays strong while inflation reheats, the Fed will face a more difficult policy environment, and exiting its tightening stance will become significantly harder. On the jobs side, the September nonfarm payrolls report will be released on October 2. August nonfarm payrolls rose by 162,000, roughly triple the market's 53,000 forecast, setting a very high bar for the September data. Market expectations currently diverge sharply: the consensus is around 90,000 to 100,000, BNP Paribas forecasts 90,000, while Bank of America Corp is more cautious at just 60,000. Bank of America Corp economist Aditya Bhave noted that a below-forecast September reading should not come as a surprise, since unusually favorable seasonal factors in August may reverse. The unemployment rate is expected to hold at 4.1%, the lowest in a year, suggesting hiring momentum has slowed but the labor market is not deteriorating rapidly. Optimistic views also exist. BNP Paribas and senior U.S. economist Andrew Husby believe that as the Fed's tightening cycle progresses, U.S. economic momentum could push the unemployment rate even lower by early 2027, and the market may be underpricing downside risks to unemployment. But there is a rift between consumer sentiment and jobs data. The University of Michigan's September consumer sentiment index fell to 48.1 from 51.7 in August; while slightly above the market's 47.5 forecast, consumers' expectations for their personal finances fell about 10%. Joanne Hsu, the survey's director, said high fuel prices and renewed trade disputes sharply lowered short-term business outlook expectations. Based on rate futures pricing, after recent hikes, the market sees about a 70% probability the Fed will raise rates another 25 basis points at its October meeting. If PCE and nonfarm payrolls come in broadly in line with expectationsa modest inflation rebound and slower but not collapsing job growththat would continue to reinforce the case for tightening. Other U.S. data this week include JOLTS job openings on September 29 and the ISM manufacturing index on October 1, which are expected to confirm U.S. economic expansion and inflation pressure, with some observers warning that volatility in global financial markets could intensify. Overseas, euro-area September CPI will be released on October 2 and is expected to rise to 3.7% year over year, the highest in three years, driven mainly by energy prices, fueling speculation about a third ECB rate hike this year. The Reserve Bank of Australia will hold its monetary policy meeting on September 29, with Australia's four major banks all expecting a 25 basis point hike to 4.6%, which would be the fourth increase this year. Although Australia's August unemployment rate rose to 4.6%, showing some cooling in the labor market, the global rate environment and inflation pressure still support the RBA in maintaining tightening. Some analysts expect another hike in November; if five hikes land this year, the benchmark rate would rise to its highest since late 2008. Indonesia and South Korea will release CPI on October 1 and October 2, respectively, with Middle East conflict pushing up international oil prices and El Nio disrupting food prices set to be key variables for Asian inflation.