Stocks Climb on Micron Earnings and Economic Optimism

The S&P 500 Index ($SPX) (SPY) today is up +0.31%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +1.21%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.55%.  September E-mini S&P futures (ESU26) are up +0.26%, and September E-mini Nasdaq futures (NQU26) are up +0.47%. 

Stock indexes whipsawed higher today, with the Dow Jones Industrials posting a new all-time high.  Strength in chipmakers is leading the broader market higher today after Micron Technology’s blowout forecast reaffirmed the bull case for the artificial intelligence trade.  Micron is up more than +11% after forecasting Q4 revenue of $50 billion, well above the consensus of $43.24 billion.  Also, Qualcomm is up by more than 4% after forecasting annual sales of more than $15 billion from artificial intelligence components for data centers by fiscal 2029.

Stocks also found support after today’s US economic news showed signs of strength in the US economy.  Q1 GDP was revised higher, weekly jobless claims fell more than expected, May personal spending and income were stronger than expected, and May capital goods new orders rose more than expected.  Also, benign inflation news knocked bond yields lower and is supportive of stocks after the May core PCE price index, the Fed's preferred inflation gauge, rose as expected.  The 10-year T-note yield fell to a 6-week low of 4.36%.

However, stocks erased early gains and briefly turned lower, with the S&P 500 falling to a 2-week low amid weakness in the Magnificent Seven technology stocks.  Apple is down more than 5% today, leading megacap stocks lower, after raising prices of Macs, iPads, home devices, and the Vision Pro to offset cost hikes driven by a shortage of memory chips and storage.

Market sentiment also improved with falling crude oil prices, as WTI crude oil (CLQ26) fell to a 4-month low today.  Saudi Arabian ships are heading for the key Ras Tanura terminal, a sign that the kingdom is set to restart exports from inside the Persian Gulf for the first time since March.  Losses in crude oil accelerated today after Iraq warned it might quit the Organization of the Petroleum Exporting Countries (OPEC) if it doesn’t get a higher output quota.

US weekly initial unemployment claims fell -12,000 to 215,000, showing a stronger labor market than expectations of 225,000.

US May personal spending rise +0.7% m/m, stronger than expectations of +0.6% m/m.  May personal income rose +0.7% m/m, stronger than expectations of +0.4% m/m and the biggest increase in 10 months.

The US May core PCE price index, the Fed's preferred inflation gauge, rose +3.4% y/y, right on expectations and the largest increase in 2.5 years.

US May capital goods new orders nondefense ex-aircraft and parts, a proxy for capital spending, rose +1.6% m/m, stronger than expectations of +0.6% m/m.

US Q1 GDP was revised upward to +2.1% (q/q annualized), stronger than expectations of no change at +1.6%.

The markets are discounting a 30% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.

Overseas stock markets are higher today.  The Euro Stoxx 50 is up +1.03%.  China's Shanghai Composite closed up +0.23%.  Japan’s Nikkei-225 Stock Average closed up sharply by +4.61%.

Interest Rates

September 10-year T-notes (ZNU6) today are up by +7 ticks, and the 10-year T-note yield is down -2.0 bp to 4.373%.  Sep T-note prices climbed to a 6-week high today, and the 10-year T-note yield fell to a 6-week low of 4.363%.  Today’s benign inflation news is supporting T-notes after the May core PCE price index, the Fed's preferred inflation gauge, rose as expected.  Also, today’s decline in WTI crude oil to a 4-month low has lowered inflation expectations and is bullish for T-notes.

Today’s generally strong US economic news was bearish for T-note prices.  Also, supply pressures are weighing on T-notes as the Treasury will auction $44 billion of 7-year T-notes later today.

European government bond yields are mixed today.  The 10-year German bund yield fell to a 3.5-month low of 2.845% and is down -1.7 bp to 2.848%.  The 10-year UK gilt yield is up +0.2 bp to 4.686%.

The German July GfK consumer confidence index rose +0.5 to -29.2, weaker than expectations of -28.0.

Swaps are discounting a 5% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.

US Stock Movers

Chipmakers and AI infrastructure stocks are rallying today, led by an +11% surge in Micron Technology (MU) after it forecasted Q4 revenue of $50 billion, well above the consensus of $43.24 billion.  Also, Sandisk (SNDK) is up more than +13%.  Qualcomm (QCOM) is up more than +4% after forecasting annual sales of more than $15 billion from artificial intelligence components in data centers by fiscal 2029.  In addition, Western Digital (WDC) and KLA Corp (KLAC) are up more than +4%, and Seagate Technology Holdings (STX) and ASML Holding NV (ASML) are up more than +3%.  Finally, Lam Research (LRCX), Analog Devices (ADI), Microchip Technology (MCHP), and Texas Instruments (TXN) are up more than +2%.

Airline stocks and cruise line operators are moving higher as today’s fall in WTI crude oil to a 4-month low reduces fuel costs and boosts profitability.  United Airlines Holdings (UAL) is up more than +5%, and Alaska Air Group (ALK) and Delta Air Lines (DAL) are up more than +4%.  Also, Royal Caribbean Cruises (RCL) and Southwest Airlines (LUV) are up more than +3%, and American Airlines Group (AAL) and Norwegian Cruise Line Holdings (NCLH) are up more than +2%.  In addition, Carnival Cruises (CCL) is up more than +1%. 

The weakness in the Magnificent Seven technology stocks is limiting gains in the overall market.  Apple (AAPL) is down more than -5% to lead losers in the Dow Jones Industrials after raising prices of Macs, iPads, home devices, and the Vision Pro to offset cost hikes caused by a shortage of memory chips and storage.  Also, Amazon.com (AMZN) and Microsoft (MSFT) are down more than -2%, and Nvidia (NVDA) and Alphabet (GOOGL) are down more than -1%.  In addition, Meta Platforms (META) is down -0.78% and Tesla (TSLA) is down -0.03%.

Cryptocurrency-exposed stocks are falling today, with Bitcoin (^BTCUSD) down more than -2% to a 1.75-year low.  Strategy (MSTR) is down more than -6%, and MARA Holdings (MARA) and Riot Platforms (RIOT) are down more than -3%.  Also, Coinbase Global (COIN) is down more than -1%, and Galaxy Digital Holdings (GLXY) is down -0.91%. 

Bio-Techne (TECH) is up by more than +19% to lead gainers in the S&P 500 after Merck & Co agreed to buy the company for about $11.3 billion, or $73 per share. 

Xylem (XYL) is up more than +5% after Jeffries upgraded the stock to buy from hold with a price target of $140.

McCormick & Co (MKC) is up more than +4% after reporting Q2 net sales of $1.94 billion, above the consensus of $1.91 billion.

Keurig Dr. Pepper (KDP) is up more than +2% after Barclays upgraded the stock to overweight from equal weight with a price target of $36.

Trip.com ADRs (TCOM) are down more than -14% after reporting Q1 adjusted earnings per American depositary receipt of 5.73 yuan, weaker than the consensus of 6.09 yuan.

HB Fuller (FUL) is down more than -8% after agreeing to buy Advance Medical Solutions Group for $868 million.

Jeffries Financial Group (JEF) is down more than -7% after reporting Q2 EPS of $1.02, weaker than the consensus of $1.24.

Dell Technologies (DELL) is down more than -5% after GF Securities downgraded the stock to hold from buy.

Earnings Reports(6/25/2026)

Acuity Inc (AYI), Darden Restaurants Inc (DRI), FedEx Freight Holding Co Inc (FDXF), McCormick & Co Inc/MD (MKC), TD SYNNEX Corp (SNX).