US Markets Mixed: Micron Surges on AI Optimism as Apple Slides

The US stock markets experienced a divergent trading session on Thursday, characterized by a sharp tug-of-war between semiconductor optimism and consumer tech headwinds. While the Dow Jones Industrial Average climbed on the back of an AI-driven rally, the Nasdaq Composite faced downward pressure due to significant losses in heavyweight technology stocks.

Micron and Qualcomm Lead the AI-Driven Rally

The primary driver for the positive movement in the Dow was the semiconductor sector, specifically companies linked to the artificial intelligence boom. Micron Technology emerged as the standout performer, with its shares surging 9.7%. This rally followed a stellar quarterly report where the memory-chip maker surpassed Wall Street’s estimates for both profit and revenue. Furthermore, Micron issued a stronger-than-expected revenue forecast for the current quarter, effectively calming investor fears regarding the potential overvaluation of AI-related stocks.

Qualcomm also contributed to the sector's strength, gaining 3.1%. The chipmaker provided a bullish long-term outlook, projecting that the rapid expansion of AI will drive non-smartphone revenue—including data centers—to USD 40 billion by fiscal 2029. This optimism echoed across Asian markets, where South Korea's Kospi surged 5.4%, bolstered by a massive 13.1% jump in SK Hynix.

Apple Faces Pressure Over Product Price Hikes

In contrast to the chipmakers, Apple saw its shares drop by 4.8%. The decline follows reports that the tech giant is implementing price increases across several product lines. Analysts noted that Mac computers could see price hikes ranging between 15% and 20%.

This move is partly driven by rising input costs; higher memory and storage prices, which are benefiting semiconductor manufacturers, are simultaneously inflating expenses for device makers like Apple. The combination of increased production costs and the risk of reduced consumer demand due to higher retail prices has weighed heavily on Apple's market performance.

Inflation Data and Easing Treasury Yields

Broader market sentiment was also influenced by macroeconomic indicators. US consumer inflation, measured by the Personal Consumption Expenditures (PCE) index, accelerated to 4.1% in May from 3.8% in April. While this represented an increase, it largely aligned with economist expectations, preventing a wider market sell-off.

The markets found additional support as Treasury yields eased. The benchmark 10-year US Treasury yield retreated to 4.36%, down from 4.41% on Wednesday and 4.56% earlier this month. Additionally, energy markets provided stability as Brent crude slipped 0.1% to USD 73.81 a barrel, aiding hopes that inflationary pressures may moderate in the coming months.

Key Takeaways

• AI Optimism Counteracts Tech Losses: Strong earnings and optimistic guidance from Micron and Qualcomm helped the Dow rise by 0.4%, despite a 1.2% drop in the Nasdaq.
• Apple’s Margin Pressure: Apple shares fell 4.8% following news of significant price hikes on Mac computers, driven by rising component costs.
• Macroeconomic Stability: Easing Treasury yields and inflation data meeting expectations provided a cushion for the markets amidst sector-specific volatility.