US stocks traded mixed on Thursday as sharp moves in Apple and Micron Technology created volatility across the technology sector.
Micron shares surged following stronger-than-expected earnings and guidance. However, a steep decline in Apple stock limited gains across the broader market.
Meanwhile, the US dollar and Treasury yields moved lower after the latest inflation report largely matched market expectations.
Dow Jones Climbs to Record High
At 11:00 ET, the S&P 500 was up 0.3% at 7,377.98 after experiencing significant swings earlier in the session.
The technology-heavy Nasdaq Composite fell 0.3% to 25,400.96. The index had moved between a gain of approximately 1% and a decline of as much as 1.4%.
In contrast, the Dow Jones Industrial Average rose 1.2% to a record high of 52,448.22.
The strong Dow performance reflected growing demand for economically sensitive stocks as investors reduced exposure to some highly valued technology companies.
Technology Stocks Remain Volatile
Thursday’s uneven trading followed a mostly negative Wall Street session on Wednesday.
Investors remained cautious toward technology stocks after the sector suffered a major selloff earlier in the week.
Concerns about elevated AI valuations, rising borrowing costs and the durability of technology spending continued to influence market sentiment.
Micron Stock Surges After Blowout Earnings
Micron Technology shares jumped approximately 13% after the memory-chip manufacturer reported outstanding quarterly results.
The company also issued guidance that exceeded even the most optimistic Wall Street forecasts.
Micron’s performance provided relief for investors following the recent decline in growth stocks.
The memory-chip maker highlighted strong demand from artificial intelligence applications and hyperscale data centers.
Strategic Agreements Support Micron’s Outlook
Vital Knowledge analyst Adam Crisafulli said the most important part of Micron’s report was not limited to its quarterly earnings or guidance.
Instead, investors focused on the company’s strategic customer agreements. Micron presented these contracts as evidence that the current memory-chip boom may be more durable than a temporary pricing cycle.
A more predictable earnings outlook could support a higher valuation multiple for Micron stock.
Strong demand is also expected to keep memory supplies limited and prices elevated. This could help semiconductor companies generate stronger returns from their large capital investments.
AI Spending Concerns Begin to Ease
Micron’s results reduced some fears that massive AI infrastructure spending may fail to produce adequate financial returns.
Investors have become increasingly concerned about technology companies funding AI expansion through debt while interest rates remain elevated.
The positive reaction extended into Asian markets. Shares of SK Hynix and Samsung Electronics rebounded after suffering heavy losses earlier in the week.
However, analysts warned that Micron’s strong profitability may not benefit the entire technology industry.
High Memory Costs Create Risks for Tech Companies
Crisafulli noted that Micron’s exceptionally high operating margin could create challenges for companies purchasing memory products.
If a small group of semiconductor suppliers captures most of the profits from AI investment, other technology companies may struggle to generate acceptable returns.
High memory prices could also reduce the free cash flow of hyperscale data center operators.
In addition, expensive chips and storage components may contribute to broader inflationary pressure across the economy.
Qualcomm Shares Rise on Data Center Outlook
Qualcomm added to the positive momentum in the semiconductor sector.
The company projected that its data center business could generate $15 billion in sales by 2029.
Qualcomm shares rose approximately 4% following the announcement.
The forecast strengthened hopes that the chipmaker can diversify beyond smartphones and establish a larger presence in the growing AI data center market.
Apple Stock Falls After Major Price Increases
Apple moved sharply lower after announcing price increases for MacBooks, iPads and home devices.
The company raised prices to offset higher costs caused by an ongoing shortage of memory chips and storage components.
The size of the increases surprised investors, raising concerns that more expensive products could weaken consumer demand.
Apple’s decline offset part of the market support provided by Micron and Qualcomm.
Wall Street Ended Wednesday Mixed
US stock indexes also finished Wednesday’s session with mixed results.
A rotation into economically sensitive companies helped the Dow close slightly higher.
However, the Nasdaq declined 0.4%, while the S&P 500 fell 0.1%.
Investors remained cautious after the earlier technology selloff and continued to assess whether high AI valuations could withstand tighter financial conditions.
Core PCE Inflation Matches Expectations
The latest Core Personal Consumption Expenditures Price Index was a major focus for financial markets.
Core PCE inflation, which excludes food and energy prices, rose 0.3% from the previous month and 3.4% from a year earlier in May.
Both readings matched market expectations, although annual core inflation increased slightly from April.
Headline PCE inflation rose 0.4% month over month and 4.1% annually. Economists had forecast increases of 0.5% and 4.1%, respectively.
Federal Reserve Policy Remains Uncertain
The in-line inflation report offered some relief to investors, contributing to declines in the dollar and Treasury yields.
However, inflation remained elevated enough to keep concerns about Federal Reserve policy alive.
Markets continue to consider the possibility that the Fed will leave interest rates high for longer or introduce another rate increase this year.
Higher interest rates can place pressure on growth and technology stocks because they reduce the present value of expected future earnings.
US GDP Revised Higher
Separate economic data showed that the US economy grew faster than previously reported during the first quarter.
Gross domestic product increased at an annualized rate of 2.1%, above the earlier estimate of 1.6%.
Economists had expected the growth rate to remain unchanged at 1.6%.
The upward revision suggested stronger headline economic activity, although weaker consumer spending raised questions about the underlying strength of demand.
Jobless Claims Beat Forecasts
Weekly initial jobless claims fell to 215,000, below the market forecast of 225,000.
The lower figure indicated that layoffs remain limited and that the US labor market continues to show resilience.
Investors will now monitor upcoming inflation reports, Federal Reserve commentary and corporate earnings for further direction.
The contrast between Micron’s AI-driven growth and Apple’s rising cost pressures highlights the increasingly uneven conditions affecting major technology companies.
