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

Wall Street experienced a tug-of-war on Thursday as a massive rally in semiconductor stocks provided a lifeline to the Dow Jones, offsetting significant losses in the tech giant Apple. While artificial intelligence continues to drive enthusiasm in the chip sector, rising product costs are weighing heavily on consumer electronics.

AI Momentum Drives Micron and Qualcomm Higher

The semiconductor sector emerged as the primary engine of growth during the session, helping to soothe investor fears regarding the valuation of AI-linked stocks. Micron Technology was the standout performer, with its shares surging 9.7% after reporting quarterly profit and revenue that significantly outperformed Wall Street estimates. Furthermore, Micron issued a robust revenue forecast for the current quarter, signaling sustained demand for memory chips driven by AI infrastructure.

Qualcomm also benefited from the AI tailwinds, posting a 3.1% gain. The company raised its long-term growth outlook, projecting that the rapid expansion of artificial intelligence will help double its non-smartphone revenue—including data center business—to $40 billion by fiscal year 2029. This sentiment was echoed in Asian markets, where South Korea's SK Hynix jumped 13.1%, helping the Kospi index surge by 5.4%.

Apple Faces Pressure from Price Hikes and Rising Costs

In contrast to the chipmakers, Apple saw its shares drop by 4.8% following news of price increases across its product lineup. Analysts noted that Mac computers, in particular, faced 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 like Micron, are simultaneously driving up production expenses for hardware giants like Apple. These increased costs are being passed down to consumers, potentially impacting demand in a sensitive economic environment.

Inflation Data and Treasury Yields Provide Market Support

Broader market sentiment received a boost from macroeconomic indicators. The US Personal Consumption Expenditures (PCE) index, a key inflation gauge, showed inflation accelerating to 4.1% in May from 3.8% in April, which aligned closely with economist expectations.

This predictable inflation data contributed to a cooling in the bond market. The yield on the benchmark 10-year US Treasury eased to 4.36% from 4.41% on Wednesday, down from 4.56% earlier this month. Additionally, Brent crude oil prices stabilized, slipping 0.1% to USD 73.81 per barrel, which helped alleviate fears of renewed inflationary pressure from energy costs.

Key Takeaways

• AI Chip Rally: Strong quarterly results from Micron and optimistic long-term forecasts from Qualcomm are driving significant gains in the semiconductor sector.
• Apple's Pricing Challenge: Apple shares fell nearly 5% as the company implemented 15% to 20% price hikes on Mac computers to offset rising component costs.
• Macroeconomic Stability: Predictable US inflation data and easing Treasury yields provided a cushion for the Dow Jones, even as the Nasdaq and S&P 500 faced volatility.