traded with solid gains in Thursday’s trade, June 25, as blockbuster earnings from Micron Technology revived the technology-led rally, which had recently come under pressure amid valuation concerns.
Nasdaq 100 futures advanced 2.2%, while futures linked to the S&P 500 and Dow Jones Industrial Average rose 0.8% and 0.2%, respectively. In the previous session, all three benchmark indices closed in the green, snapping their two-day losing streak.
Micron’s much-anticipated earnings offered signs that AI-led investments are generating healthy returns, helping ease valuation concerns. The stronger-than-expected numbers also revived the rally in chip stocks, with several names trading with double-digit gains in pre-market trade. Sentiment towards the AI infrastructure sector was further supported after Micron unveiled 16 long-term contracts.
Micron reported that its revenue more than quadrupled to $41.46 billion in its fiscal third quarter from $9.3 billion a year earlier. The company expects revenue to touch $50 billion in the current quarter, compared with $11.3 billion in the corresponding period last year.
“For investors who spent much of this week worrying about slowing demand and stretched valuations, offered reassurance that the AI investment cycle is still intact,” said domestic brokerage firm Vested Finance.
“The earnings report is significant because Micron sits at the heart of the AI supply chain. Its memory chips are critical for training and running advanced AI models, making the company’s performance one of the clearest indicators of whether AI spending remains strong,” the brokerage added.
Attention will turn on Thursday to the release of May’s PCE index, the Federal Reserve’s preferred inflation gauge. Forecasters expect the data to show an acceleration in inflation on both a monthly and year-on-year basis.
Such a reading is unlikely to challenge the growing consensus at the Federal Reserve around the need for interest-rate hikes this year. While investors have scaled back bets on the magnitude of rate increases over the coming year as shed their war-driven premium, markets continue to see a hike as early as September.
Traders are also increasing bets on a second-rate hike by the Federal Reserve by the end of December, according to CME Group’s FedWatch tool, compared with earlier expectations of a single 25-basis-point increase.
Meanwhile, optimism surrounding an end to the war and strong earnings growth expectations have put the S&P 500 on track for its strongest quarterly gain in six years, despite expectations of higher interest rates.
Crude slips to four-month low
Oil prices fell to their as more oil tankers were expected to move out of the Strait of Hormuz. US President Donald Trump said Iran had told Washington that no tolls were being sought.
Brent crude futures slipped another $1.45 a barrel to a four-month low of $72.42, while WTI crude futures fell $1.40 to $68.95 a barrel. In addition to optimism over a long-term peace deal in the Middle East, a temporary US waiver permitting purchases of already-loaded Iranian oil also dragged prices lower.
US stocks in focus today
Among individual stocks, Micron shares gained 16% in pre-market trade, while its strong revenue guidance also boosted Qualcomm shares by 11.7%. Other chip stocks, including SanDisk, Western Digital, Lam Research, KLA, and Applied Materials, also rose in sympathy.
(With inputs from Bloomberg and Reuters)
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