US Markets Mixed: Micron Surges on AI Optimism as Apple Faces Pressure

Wall Street experienced a divergent trading session on Thursday, as a massive rally in semiconductor stocks provided a lifeline to the Dow Jones amidst a broader tech sell-off. While AI-driven optimism fueled gains for chipmakers, consumer tech giant Apple struggled following news of significant product price hikes.

AI Optimism Drives Micron and Qualcomm Higher

The primary engine of growth during the session was the semiconductor sector, which helped alleviate fears that AI-related stocks had become overvalued. Micron Technology emerged as the standout performer, with its shares surging 9.7%. The memory-chip maker reported quarterly profits and revenue that significantly exceeded Wall Street estimates and provided a robust revenue forecast for the upcoming quarter.

Qualcomm also benefited from the AI tailwind, seeing its stock rise 3.1%. The company shared a bullish long-term outlook, projecting that the rapid expansion of artificial intelligence will drive non-smartphone revenue—including data centers—to reach USD 40 billion by fiscal 2029. This sentiment was echoed in Asian markets, where South Korea’s SK Hynix jumped 13.1%, driving the Kospi index up by 5.4%.

Apple Struggles Amid Price Hikes and Rising Costs

In stark contrast to the chipmakers, Apple saw its shares tumble by 4.8%. The decline followed reports that the company is implementing price increases across several key product lines. Analysts noted that Mac computers could see price hikes ranging from 15% to 20%.

This move comes at a challenging time for device manufacturers. The rising costs of memory and storage, which are currently benefiting semiconductor companies, are simultaneously driving up production expenses for hardware makers like Apple. Investors appear concerned that these increased costs could dampen consumer demand.

Inflation Data and Treasury Yields Stabilize Markets

Broader market sentiment was also influenced by macroeconomic indicators. The US Personal Consumption Expenditures (PCE) index, a key inflation gauge, showed May inflation at 4.1%, up from 3.8% in April. While this indicated an acceleration, it largely matched economist expectations, preventing a deeper market sell-off.

The stability in inflation data helped ease Treasury yields. The benchmark 10-year US Treasury yield retreated to 4.36%, down from 4.41% on Wednesday and 4.56% earlier in the month. Furthermore, Brent crude oil prices eased slightly to USD 73.81 per barrel, offering some relief regarding potential inflationary pressures from energy costs.

Market Performance Summary

The mixed performance was reflected in the major indices:

  • Dow Jones Industrial Average: Up 228 points (0.4%)
  • S&P 500: Slipped 0.3%
  • Nasdaq Composite: Fell 1.2%, weighed down by large-cap technology declines

Key Takeaways

  • AI is a powerful catalyst: Strong earnings and optimistic forecasts from Micron and Qualcomm are successfully combating fears of AI sector overvaluation.
  • Margin pressures for device makers: Rising component costs (memory/storage) are forcing companies like Apple to hike consumer prices, potentially impacting sales volume.
  • Macro indicators remain pivotal: Stable inflation data (PCE) and easing Treasury yields are providing a much-needed cushion for global market volatility.