Nasdaq Slips 0.46% as Apple's 6% Plunge Offsets Micron's 15% Surge Amid Inflation & Fed Rate Fears

Mumbai, June 26: The Nasdaq Composite closed Thursday’s session in negative territory, falling 118.03 points (0.46%) to settle at 25,358.60, as a brutal sell-off in mega-cap technology stocks, led by Apple’s 6% decline, overshadowed a powerful AI-driven rally in semiconductor shares.

The benchmark S&P 500 inched lower by 0.01% to 7,357.49, while the blue-chip Dow Jones Industrial Average bucked the trend, rising 0.14% to 51,920.62 and touching a new intraday record high of 52,655.66 during the session.

Apple’s 6% Slump, Microsoft’s 3.6% Fall Weigh on Nasdaq as Product Price Hikes Trigger Demand Concerns

Technology behemoth Apple (AAPL) suffered its steepest single-day decline in recent months, tumbling 6% to approximately $277, erasing most of its gains for the year. The sell-off followed the company’s announcement of significant price increases across its MacBook and iPad product lines, citing rising component costs, particularly for memory chips.

The MacBook Air climbed $200 to $1,299, the MacBook Pro rose $300 to $1,999, the iPad Air increased $150 to $749, and the iPad Pro surged $200 to $1,199. Even the budget-friendly Neo line saw a $100 hike to $699.

Just days after Apple CEO Tim Cook warned that rising memory costs could make price increases unavoidable, Apple raised prices amid an industry-wide chip shortage. With Micron’s margins jumping to 84.6% from under 40% a year ago, analysts say higher memory costs may lead to further Apple price hikes. Despite maintaining an “outperform” rating and a $400 target, Apple’s stock remains 13% below its record high reached earlier this month.

Also Read: How to Invest in the US Stocks From India?

Microsoft fell 3.6% after announcing Xbox price hikes of $100 for the 512GB model and $150 for the 1TB version, citing the fact that consoles are typically sold below production cost. The weakness spread across big tech, with Nvidia down 2%, Amazon losing 3.15%, and Meta slipping 2.69%, prompting investors to shift toward industrial, healthcare, and financial stocks.

Micron’s Blockbuster 15% Surge, $41.46 Billion Revenue Ignites Memory Stock Rally Amid AI Demand Boom

The semiconductor sector provided the day’s most compelling bullish narrative as Micron Technology (MU) shares skyrocketed 15% to approach record highs after delivering fiscal third-quarter results that obliterated Wall Street expectations. The memory chip giant reported revenue of $41.46 billion, more than quadrupling from $9.3 billion a year earlier and crushing analyst estimates of approximately $35.6 billion. Adjusted earnings per share came in at $25.11, substantially beating the $20.78 consensus, while gross margins surged to 84.6% from 37.7% in the year-ago period.

The company’s fiscal fourth-quarter revenue guidance of $49 billion to $51 billion and adjusted EPS forecast of $30 to $32 both exceeded analyst projections. Micron also disclosed that customers had committed $22 billion to secure its memory chips through 16 long-term contracts, with the company expecting the memory-chip shortage to persist beyond 2027. Wedbush analysts lifted their price target to $1,400, noting the details around long-term contracts could provide “unprecedented revenue, margin and earnings certainty for an elongated period.”

The Micron earnings catalyst reverberated across the memory sector, with Sandisk (SNDK) soaring 21.47% to $2,333.91, Western Digital (WDC) rising 4.83%, and Seagate Technology (STX) gaining 3.17%. The broader semiconductor complex also rallied, with Applied Materials (AMAT) jumping 13.31%, KLA Corporation (KLAC) advancing 7.62%, and Lam Research (LRCX) climbing 7.07%. The Philadelphia SE Semiconductor Index remains on track for its strongest quarter on record, underscoring the sustained AI infrastructure spending boom.

Qualcomm Jumps 3.76% on $15 Billion Data Centre Revenue Target, AI Collaboration with Meta

Qualcomm (QCOM) shares rose 3.76% after the chipmaker unveiled ambitious long-term growth targets during its investor day presentation. The company now expects “non-handset” revenue of $40 billion by fiscal 2029, nearly doubling its previous forecast of $22 billion, driven by an estimated $15 billion or more in data centre revenue from its new AI-focused products. Qualcomm also announced a collaboration with Meta Platforms (META) to supply CPUs starting in the back half of 2028.

The company, which has spent years as a dominant player in the smartphone chip-making industry, is positioning itself for significant growth in AI infrastructure spending. The positive sentiment lifted other semiconductor names, with Texas Instruments (TXN) advancing 2.87%, Advanced Micro Devices (AMD) gaining 2.54%, and ASML Holding (ASML) rising 4.46%. The iShares Semiconductor ETF (SOXX) advanced 2% on the session.

Dow Hits Record 52,655.66 as Industrials & Healthcare Rally; Caterpillar Surges 6%, UnitedHealth Jumps 2.44%

The Dow Jones Industrial Average outperformed major indexes, touching a record intraday high of 52,655.66 before closing up 71.72 points (0.14%) at 51,920.62. Gains were driven by a rotation into industrial, healthcare, and financial stocks. Caterpillar (CAT) surged 6%, contributing about 321 points to the Dow’s advance, while UnitedHealth (UNH) gained 2.44%, Merck (MRK) climbed 4.03%, Goldman Sachs (GS) rose 1.09%, JPMorgan Chase (JPM) added 0.48%, Sherwin-Williams (SHW) advanced 0.48%, and Johnson & Johnson (JNJ) gained 1.61%. Meanwhile, Boeing (BA) fell 1.04% and McDonald’s (MCD) dropped 3.38%.

PCE Inflation Hits 4.1% as Fed Rate Hike Bets Grow (100 words)

The Fed’s preferred inflation gauge, the PCE Price Index, rose 0.4% month-over-month and 4.1% year-over-year in May, its highest annual rate since April 2023. Core PCE increased 0.3% monthly and 3.4% annually, the strongest reading since October 2023, matching forecasts.

Inflation was driven by energy prices (+6.5%), alongside gains in healthcare (+0.4%), transportation (+0.8%), and financial services (+1.6%). The 10-year Treasury yield slipped to 4.384%, while the 30-year yield stood at 4.858%. Markets now price in at least one 25-basis-point Fed rate hike by year-end, with a 30% chance of a July hike.

Oil Falls Below $73 as Iran Deal Eases Supply Concerns (100 words)

Oil prices slid to multi-month lows after an initial accord to end the U.S.-Israeli conflict with Iran eased supply fears. Brent crude fell below $73 a barrel, while WTI dropped under $70. Energy Secretary Chris Wright said Iran could resume exports of 1.5–2 million barrels per day.

Lower oil prices boosted travel stocks, with the S&P 500 passenger airlines index rising 5.2%, while Expedia Group and Booking Holdings advanced. Consumer discretionary stocks gained 0.8% and industrials rose 1.2%. Meanwhile, Exxon Mobil (XOM) added 0.47%, Chevron (CVX) rose 0.48%, and U.S. natural gas futures climbed 3.8% to $3.343/MMBtu.

Strategy Stock Plunges 9.44% to $85.33 as Bitcoin Tumbles Below $60,000, Crypto Fear Index Hits ‘Extreme Fear’

Strategy (MSTR), formerly MicroStrategy, plunged 9.44% to $85.33 as Bitcoin fell to $59,200, its lowest level since 2024 and more than 50% below its October peak of $126,000. The sell-off pushed CoinMarketCap’s Crypto Fear and Greed Index into “extreme fear” territory.

Strategy’s Stretch preferred stock (STRC) dropped to a record low of $74, about 25% below par. The company, which holds substantial Bitcoin reserves, has lost nearly 80% of its value over the past year. Investors are also questioning the sustainability of STRC’s 11.5% dividend, despite management’s willingness to raise the payout rate if needed.

U.S. markets reflected competing forces: robust AI-driven semiconductor earnings offset by valuation concerns in big tech, lower oil prices supporting cyclical sectors, and persistent inflation reinforcing expectations of further Fed tightening. Investors will closely watch upcoming inflation data, corporate guidance from technology firms, and Federal Reserve commentary for policy clues.

Source

• https://www.nasdaq.com/

• spglobal.com/spdji/en/indices/equity/sp-500/

• https://www.dowjones.com/