Wall Street delivered a split verdict on Thursday as a blowout earnings report from Micron Technology lifted the Dow Jones to a fresh all-time intraday high, while price hike announcements from Apple and Microsoft dragged the Nasdaq lower for the session. Markets were also digesting the latest reading on the Federal Reserve’s preferred inflation gauge, which came in hotter than investors might have hoped, reinforcing expectations that rate cuts remain a distant prospect.
What Moved Markets
The Dow Jones Industrial Average ended the day at 51,920.62, up 71.72 points, or 0.14%, as cyclical and industrial names picked up the slack from struggling tech giants. The S&P 500 barely budged, closing essentially flat at 7,357.49, off just 0.01%. The Nasdaq Composite bore the brunt of the tech pressure, falling 0.46% to finish at 25,358.60.
The biggest macro event of the day was the release of the Personal Consumption Expenditures (PCE) price index – the inflation measure the Fed watches most closely. Headline PCE came in at a 4.1% annual rate, the highest reading since April 2023. Core PCE, which strips out food and energy, rose 3.4% year-over-year, matching forecasts but doing little to ease concerns about the inflation outlook. With core inflation still running well above the Fed’s 2% target, the data effectively took any near-term rate cut off the table and sent the 10-year Treasury yield dipping slightly to 4.394% as investors weighed the implications.
Complicating the picture further, Apple and Microsoft both announced price increases for key hardware products, citing the surging cost of memory and storage chips. Apple said it will raise prices on select MacBooks and iPads by up to $300, while Microsoft plans to raise Xbox Series X and S console prices by $100 to $150 starting August 1 – the console’s third price hike – and will discontinue its 2TB model entirely. Both companies pointed to the rapid expansion of AI data centers as the force driving semiconductor shortages and input cost inflation.
Notable Movers
Micron Technology (MU) surged 17% after delivering fiscal third-quarter results that blew past Wall Street expectations. The memory chip maker reported roughly $50 billion in projected revenue for the quarter ending in August, well above analyst estimates of $43.2 billion, and announced 16 new longer-term supply contracts. The report was closely watched as a bellwether for whether AI-driven demand represents a structural shift in the memory market – and Micron answered with a resounding yes.
Apple (AAPL) fell 6.35% after the company said it would raise prices on MacBooks and iPads due to the same memory cost pressures that are juicing Micron’s earnings. The iPhone lineup was not affected by the price changes, but investors were unnerved by the signal that hardware margins are under pressure even at the world’s most valuable company.
Microsoft (MSFT) dropped 3.78% on its own price hike announcement for Xbox consoles. The company noted that console storage and memory costs have more than doubled and are expected to double again by late 2027, a stark reminder that the AI infrastructure buildout is creating winners and losers across the tech landscape.
Bio-Techne Corp (TECH) jumped nearly 20% after Merck announced it would acquire the life sciences tools company in an $11.3 billion deal, providing a welcome piece of M&A news in an otherwise jittery session for growth stocks.
Qualcomm (QCOM) rallied 10% after management doubled its projection for non-handset revenue over the next three years, a signal that the chipmaker’s push beyond smartphones into automotive, industrial, and AI edge computing is gaining real traction with investors.
Looking Ahead
With the June PCE reading now in hand, investors will be turning their attention to the Fed’s next policy meeting and any fresh guidance from Chair Jerome Powell on the pace of any eventual rate cuts. The memory chip story will continue to dominate headlines – Micron’s blowout quarter and the Apple and Microsoft price increases are two sides of the same coin, and how consumers and businesses respond to higher hardware prices will be worth watching closely. Earnings season kicks into higher gear in the coming weeks, and with the Nasdaq now under pressure from its Magnificent 7 stalwarts, the market’s next leg higher may depend on whether the rest of the S&P 500 can keep picking up the slack.