US Markets Mixed: Micron Surges on AI Optimism as Apple Shares Slide

US stock markets displayed a divergent performance on Thursday, as a massive rally in artificial intelligence-linked semiconductor stocks provided a cushion for the Dow Jones. While chipmakers found strength in robust earnings and bullish outlooks, the tech giant Apple faced significant pressure following announcements of product price hikes.

Micron and Qualcomm Drive AI-Led Rally

The semiconductor sector emerged as a primary driver for market stability, specifically addressing investor fears regarding the valuation of AI-linked stocks. Micron Technology led the charge with a massive 9.7% surge after reporting quarterly profits and revenue that significantly outperformed Wall Street's estimates. Furthermore, Micron issued a stronger-than-expected revenue forecast for the current quarter, reinforcing confidence in the AI hardware cycle.

Qualcomm also benefited from the optimistic sentiment, gaining 3.1%. The company raised its long-term growth projections, anticipating that the rapid expansion of artificial intelligence will help double its revenue from non-smartphone businesses—such as data centers—to USD 40 billion by fiscal 2029. This rally echoed in Asian markets, where South Korea's SK Hynix jumped 13.1%, contributing to a 5.4% surge in the Kospi index.

Apple Faces Headwinds from Price Hikes

In contrast to the chipmakers, Apple shares dropped by 4.8%, weighing heavily on the Nasdaq Composite, which fell 1.2%. The decline follows reports that Apple is increasing prices across several product lines to offset rising costs. Analysts noted that Mac computers are seeing price hikes ranging from 15% to 20%.

The pressure on Apple is two-fold: the company is navigating consumer sensitivity to higher pricing while simultaneously facing increased production expenses. The rising costs of memory and storage components, which are currently benefiting semiconductor manufacturers, are directly inflating the expenses for device makers like Apple.

Broader market sentiment was also influenced by US economic data and cooling energy prices. The Personal Consumption Expenditures (PCE) index, a key inflation metric, showed May inflation at 4.1%, up from 3.8% in April, which aligned closely with economist expectations.

This stability helped ease Treasury yields. The benchmark 10-year US Treasury yield eased to 4.36% from 4.41% on Wednesday, providing some relief to equity markets. Additionally, Brent crude oil retreated slightly to USD 73.81 per barrel, down from its brief peak above USD 100 during the Iran conflict, raising hopes that energy-driven inflationary pressures may moderate in the near term.

Key Takeaways

  • AI Sector Strength: Robust earnings from Micron and an optimistic long-term growth forecast from Qualcomm have mitigated concerns about AI stock overvaluation.
  • Apple’s Margin Pressure: Apple is facing a dual challenge of rising component costs and the need to implement significant price hikes (up to 20% on Macs) to maintain margins.
  • Macroeconomic Stability: Inflation data meeting expectations and easing Treasury yields have provided a stabilizing effect on the Dow, even as the Nasdaq struggles with large-cap tech volatility.