US stock markets opened mixed on Thursday with Dow Jones rising 228 points or 0.4% in morning trade, while S&P 500 slipped 0.3% after giving up early gains and Nasdaq Composite fell 1.2%, weighed down by declines in large technology stocks. This represents a significant acceleration from Wednesday's modest recovery attempt, when S&P 500 futures rose 0.27% and Nasdaq 100 futures climbed 0.4%. The previous session had seen the S&P 500 fall 1.5% as investors questioned the AI trade that has driven markets higher for much of the past year. The semiconductor index had plunged 8% as investors reassessed whether massive spending on AI infrastructure would ultimately translate into profits. Dow Jones Industrial Average futures declined 0.05%, with the index including fewer tech stocks trading broadly flat. The broader market index rose 0.4% while the Nasdaq Composite gained 0.5% as oil prices continued their decline. At the opening bell, Dow Jones Industrial Average fell 6.1 points (0.01%) to 51,660.75, while S&P 500 rose 5.4 points (0.07%) to 7,370.88 and Nasdaq Composite dropped 8.4 points (0.03%) to 25,578.624. The subdued performance reflects continued investor caution ahead of key earnings releases, but the latest surge indicates renewed confidence in AI-related stocks.
Micron Technology shares surged 9.7% on Thursday after the company posted record earnings for the preceding quarter. Micron's revenue jumped multifold to $41 billion, as compared to $9 billion in the same period last year, with the company expecting revenue to cross $50 billion for the current quarter compared with $11.3 billion in the corresponding period last year. According to The Times of India, both revenue and Earnings Per Share (EPS) for Micron were well above analyst expectations, as was its guidance for the fourth quarter of its ongoing fiscal year. The company expects revenue to cross $50 billion for Q4, while analysts were working with a figure of $43.58 billion. As a result of this strong quarter, Micron shares jumped 16% in premarket trading, with the stock having already risen 700% over the last 12 months. The company stands out even among the sector's top performers, with chipmakers among the biggest beneficiaries of the AI boom delivering triple-digit gains this year. Micron shares rose around 2% in premarket trade, while Sandisk gained nearly 3%, recovering part of Tuesday's losses.
Qualcomm shares gained 3.1% after the company raised guidance for its non-handset revenue in fiscal 2029, with customers having committed $22 billion to secure Micron's memory chips. According to The Times of India, Qualcomm also surged after Micron's results, with the company having held its own investor day on Wednesday where it projected $40 billion from Data Center sales by fiscal 2029. The positive momentum extended across the entire memory chip manufacturing sector, with Sandisk, Western Digital and Seagate Technology rising between 15.2% and 9.9%. The strong quarterly performance from Micron has allayed investor concerns that the recent rally in chip stocks may not be sustainable, with the sector's recovery gaining momentum from the positive results.
Apple shares dropped 4.8% after the company announced price increases across several products, including 15% to 20% hikes for Mac computers, according to analysts cited by The Times of India. This represents a significant shift from the company's previous strategy of maintaining competitive pricing to drive market share. The price increases come as Apple continues to navigate the challenging technology market environment, where AI-related chipmakers are experiencing strong demand while traditional technology companies face pressure from rising input costs and competitive dynamics. The decline in Apple shares contrasts sharply with the rally in AI-focused companies, highlighting the divergent performance across different technology sectors.
May's Personal Consumption Expenditures (PCE) index rose 4.1% year-over-year, in line with expectations and up from 3.8% in April, while month-over-month inflation increased 0.4%, just below the 0.5% rise that economists polled by Dow Jones were expecting. According to CNBC TV18, excluding volatile food and energy prices, core PCE gained 0.3% month over month and 3.4% year over year, reaching the highest level since October 2023. While core inflation reached its highest level since October 2023, investors were relieved the numbers weren't even higher in the wake of rising energy prices from the West Asia conflict. Headline PCE inflation for May came in at 4.1% versus 38% in the previous month, which cooled off market concerns and remained significantly higher than the Federal Reserve's long-term inflation target of 2%. The inflation print remains a key focus for investors as it tracks the preferred metric used by the Federal Reserve to gauge core inflation in the economy.
