Stocks Rally Before the Open on Upbeat Micron Earnings, U.S. PCE Inflation Data in Focus

September S&P 500 E-Mini futures (ESU26) are up +0.78%, and September Nasdaq 100 E-Mini futures (NQU26) are up +2.15% this morning as upbeat quarterly results and guidance from memory chipmaker Micron Technology boosted sentiment.

Micron Technology (MU) jumped over +16% in pre-market trading after the largest U.S. maker of computer memory chips posted upbeat FQ3 results, issued FQ4 sales guidance that far exceeded Wall Street estimates, and said the chip shortage would extend beyond 2027. Also aiding sentiment was Qualcomm (QCOM), whose shares surged more than +11% in pre-market trading after the chipmaker raised its long-term non-handset revenue target and disclosed that two Big Tech companies were among its customers.

Sentiment drew further support from oil prices returning to near prewar levels as tanker traffic through the Strait of Hormuz picked up. The price of WTI crude fell over -1% to below $70 a barrel. According to ship-tracking firm Kpler, a total of 14 oil tankers transited the maritime chokepoint on Tuesday and 27 on Monday, marking an uptick from 37 tanker transits over the weekend.

Attention now turns to the release of the Federal Reserve’s preferred inflation gauge as well as remarks from Fed officials.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed mixed. Chip and AI infrastructure stocks dropped, with Seagate Technology Holdings (STX) falling over -4% and Qualcomm (QCOM) sliding more than -3%. Also, mining stocks slumped as gold and silver prices sank, with AngloGold Ashanti (AU) dropping over -6% and Coeur Mining (CDE) falling more than -5%. In addition, Cerebras Systems (CBRS) tumbled over -19% as the chipmaker’s full-year revenue guidance failed to impress investors. On the bullish side, shares of homebuilders and building suppliers rallied after Congress passed the 21st Century ROAD to Housing Act, with KB Home (KBH) jumping more than +16% and Builders FirstSource (BLDR) surging over +11% to lead gainers in the S&P 500.

Economic data released on Wednesday showed that U.S. new home sales unexpectedly fell -7.3% m/m to a 4-month low of 580K in May, weaker than expectations of 638K. Also, U.S. May building permits fell -0.9% m/m to 1.410 million, weaker than expectations of 1.413 million.

“Good luck raising interest rates with housing rolling over. Markets are a little offside on their hike predictions right now, so investors might want to pick up tech stocks during this little swoon,” said Jamie Cox at Harris Financial Group.

Meanwhile, U.S. rate futures have priced in a 65.8% chance of no rate change and a 34.2% chance of a 25 basis point rate hike at next month’s monetary policy meeting.

Today, all eyes are on the U.S. core personal consumption expenditures price index, the Fed’s preferred inflation gauge, which is set to be released in a couple of hours. The PCE report will cap off a month of disappointing inflation data, with earlier releases showing the effects of the energy shock spreading throughout the economy. Economists, on average, forecast that the core PCE price index will rise +0.3% m/m and +3.4% y/y in May, compared to +0.2% m/m and +3.3% y/y in April.

The U.S. Commerce Department’s final estimate of first-quarter gross domestic product will also be closely monitored today. Economists expect the U.S. economy to expand at an annual rate of 1.6% in the first quarter, in line with a second estimate.

U.S. Personal Spending and Personal Income data will be released today. Economists project May Personal Spending to rise +0.6% m/m and Personal Income to grow +0.4% m/m, compared to the April figures of +0.5% m/m and unchanged m/m, respectively.

U.S. Durable Goods Orders and Core Durable Goods Orders data will come in today. Economists expect May Durable Goods Orders to drop -5.0% m/m and Core Durable Goods Orders to rise +0.5% m/m, compared to the prior numbers of +7.9% m/m and +1.1% m/m, respectively.

U.S. Initial Jobless Claims data will be released today as well. Economists expect this figure to be 225K, compared to last week’s number of 226K.

In addition, market participants will parse comments today from New York Fed President John Williams, Fed Vice Chair for Supervision Michelle Bowman, and Chicago Fed President Austan Goolsbee.

On the earnings front, notable companies such as Darden Restaurants (DRI), FedEx Freight Holding Company (FDXF), and McCormick (MKC) are set to report their quarterly figures today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.41%, up +0.50%.

The Euro Stoxx 50 Index is up +0.65% this morning, led by gains in technology stocks as Micron’s blockbuster quarterly results and guidance revived investor confidence in the AI trade. Sentiment received an additional boost from oil prices returning to near prewar levels. A survey released on Thursday showed that German consumer sentiment improved slightly heading into July, with U.S.-Iran peace negotiations helping stabilize confidence, albeit at subdued levels. “The consumer climate is currently stabilizing at a low level,” said Rolf Buerkl, head of consumer climate at NIM. A separate survey showed that France’s consumer confidence indicator rebounded slightly in June as households grew less pessimistic about their financial situation. Meanwhile, oil prices continued to decline, nearly returning to levels seen before the Iran war and easing concerns about inflationary pressures. Still, European Central Bank Executive Board member Isabel Schnabel said in an interview that the central bank would need to continue raising interest rates to rein in inflation, which surged on higher energy prices driven by the Middle East conflict. “However, the extent and timing of further measures will depend on how the conflict, the economy and inflation evolve,” Schnabel added. In corporate news, H&M (HMB.S.DX) fell over -2% after the Swedish fashion retailer posted weaker-than-expected Q2 operating profit.

Germany’s GfK Consumer Climate Index, France’s Consumer Confidence, and Spain’s GDP data were released today.

The German July GfK Consumer Climate Index came in at -29.2, weaker than expectations of -27.8.

The French June Consumer Confidence stood at 84, stronger than expectations of 83.

The Spanish GDP rose +0.6% q/q and +2.7% y/y in the first quarter, in line with expectations.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.23%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +4.61%.

China’s Shanghai Composite Index closed higher today, led by gains in the tech sector. Semiconductor and other AI-related stocks climbed on Thursday after U.S. memory chipmaker Micron delivered blockbuster quarterly results and guidance, reinforcing the bull case for the AI trade. “We remain positive on China’s AI tech hardware names for the rest of the year, given strong earnings momentum, fervent retail participation, and fresh capital from new IPOs, which would add further fuel for the AI build-out,” said James Wang at UBS Investment Bank Research. Brokerage and liquor stocks also advanced. Meanwhile, the People’s Bank of China said on Thursday that it will conduct overnight reverse repurchase agreement operations on Monday and Tuesday, marking a key step toward reshaping how it manages short-term borrowing costs. The move follows comments from PBOC Governor Pan Gongsheng last week that the central bank would broaden its short-term liquidity toolkit. Elsewhere, China launched the marketing of up to 5 billion euros ($5.7 billion) in sovereign bonds in what could become its largest-ever euro-denominated bond offering. In corporate news, JCET Group jumped +10% after China’s largest semiconductor packaging and testing company announced plans to invest more than $1 billion to expand its advanced chip-packaging capacity. Investor attention is now squarely on China’s industrial profit data for May, scheduled for release over the weekend.

Japan’s Nikkei 225 Stock Index closed sharply higher and hit a new record high today after Micron’s blowout sales forecast reignited investor enthusiasm for the AI trade. Chip and other AI-related stocks rallied on Thursday. Micron’s earnings “prompted investors to come back in and buy again, and that explains today’s rebound,” said Hiroyuki Ueno at Sumitomo Mitsui Trust Asset Management Co. Chip-testing equipment maker Advantest jumped over +15% and memory maker Kioxia Holdings surged more than +12%, providing the biggest lift to the Nikkei. The latter also got a boost after announcing plans to offer U.S. depositary shares in the spring of 2027 and to conduct a stock split. Also buoying sentiment, oil prices fell toward prewar levels as flows through the Strait of Hormuz ramped up. Data released on Thursday showed that Japan’s April leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, was revised higher. Meanwhile, hawkish Bank of Japan board member Naoki Tamura said on Thursday that the central bank should raise interest rates every few months and consider accelerating the pace of tightening if inflation risks intensify. Tamura noted that underlying inflation had already reached the bank's 2% target and that upside risks to prices merit close attention regardless of developments in the Middle East. In other news, foreign investors bought a net 479.4 billion yen ($2.96 billion) worth of Japanese stocks in the week ended June 20th, marking their first weekly net buying since May 23rd, according to Ministry of Finance data. Investor focus is now squarely on Japan’s Tokyo Core CPI for June, scheduled for release on Friday, which is expected to reflect the impact of rising energy prices, although the underlying inflation trend may be clouded by the effects of subsidies. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -22.47% to 30.77.

The Japanese April Leading Index came in at 116.1, stronger than expectations of 115.9.

Pre-Market U.S. Stock Movers

Micron Technology (MU) jumped over +16% in pre-market trading after the largest U.S. maker of computer memory chips posted upbeat FQ3 results, issued FQ4 sales guidance that far exceeded Wall Street estimates, and said the chip shortage would extend beyond 2027.

Chip and AI infrastructure stocks climbed in pre-market trading as strong quarterly results and guidance from Micron reinforced the bull case for the AI trade. Sandisk (SNDK) was up over +14%, Western Digital (WDC) was up more than +12%, and Intel (INTC) was up over +5%.

Qualcomm (QCOM) surged more than +11% in pre-market trading after the chipmaker raised its long-term non-handset revenue target and disclosed that two Big Tech companies were among its customers.

Affirm Holdings (AFRM) slid over -2% in pre-market trading after Morgan Stanley downgraded the stock to Equal Weight from Overweight.

Alphabet (GOOGL) fell over -1% in pre-market trading after Bloomberg reported that two researchers key to Google’s Gemini AI model, Jonas Adler and Alexander Pritzel, were planning to leave for rival Anthropic PBC.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - June 25th

Darden Restaurants (DRI), FedEx Freight Holding Company (FDXF), TD SYNNEX (SNX), McCormick & Company (MKC), Acuity (AYI), Commercial Metals Company (CMC), BlackBerry (BB), Winnebago Industries (WGO), American Outdoor Brands (AOUT), Virtuix Holdings (VTIX).