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

US stock markets displayed a divergent trend on Thursday as a massive rally in artificial intelligence-linked semiconductor stocks offset significant losses in big tech heavyweights. While the Dow Jones Industrial Average gained momentum, the Nasdaq Composite faced downward pressure, reflecting a tug-of-war between AI optimism and consumer pricing concerns.

Micron and Qualcomm Lead the AI Rally

The semiconductor sector provided a much-needed boost to investor sentiment, helping to soothe fears that AI-related stocks had become overvalued. Micron Technology emerged as the star performer, with its shares surging 9.7% in morning trade. The memory-chip manufacturer reported quarterly profits and revenue that comfortably exceeded Wall Street estimates, coupled with a robust revenue forecast for the upcoming quarter.

Qualcomm also contributed to the tech rally, climbing 3.1%. The chipmaker raised its long-term growth outlook, projecting that the rapid expansion of artificial intelligence will drive its non-smartphone business revenue—including data centers—to reach USD 40 billion by fiscal 2029. This surge in semiconductor demand was also mirrored in Asian markets, where South Korea’s SK Hynix jumped 13.1%, sending the Kospi higher by 5.4%.

Apple Faces Headwinds from Price Hikes

In stark contrast to the chipmakers, Apple shares tumbled 4.8%. The decline follows the company's decision to implement price increases across several product lines. Analysts noted that Mac computers, in particular, saw price hikes ranging from 15% to 20%.

This move comes at a challenging time for device manufacturers, as rising memory and storage costs—which are benefiting semiconductor firms—are simultaneously driving up production expenses for companies like Apple. The combination of higher manufacturing costs and the subsequent need to raise consumer prices appears to be weighing heavily on Apple's market valuation.

Inflation Data and Treasury Yields Stabilize Markets

Broader market sentiment was further supported by easing Treasury yields and inflation data that largely aligned with economist expectations. The US Personal Consumption Expenditures (PCE) index, a key inflation gauge, showed an acceleration to 4.1% in May from 3.8% in April, meeting the anticipated figures.

Following this data, the yield on the benchmark 10-year US Treasury eased to 4.36%, down from 4.41% on Wednesday and 4.56% earlier this month. Additionally, energy prices provided some relief; Brent crude slipped 0.1% to USD 73.81 a barrel. The retreat from previous highs seen during the Iran conflict has raised hopes among investors that inflationary pressures may moderate in the coming months.

Key Takeaways

  • AI Momentum: Strong earnings from Micron and optimistic long-term forecasts from Qualcomm have reinforced investor confidence in the artificial intelligence sector.
  • Tech Divergence: While chipmakers thrive, hardware giants like Apple are struggling with rising component costs and the market impact of significant product price hikes.
  • Macro Stability: Predictable US inflation data and easing Treasury yields have provided a stabilizing backdrop for the broader financial markets.