US stocks rise on Micron earnings as PCE inflation hits 4.1%

Micron Technology surged 15% in pre‑market trading after reporting fiscal Q3 earnings that beat Wall Street expectations, while the personal consumption expenditures (PCE) price index showed inflation at a 4.1% annual rate—the highest level since April 2023—keeping equity markets choppy but overall positive on Thursday【2】.

Earnings beat fuels memory‑chip rally

Micron’s fiscal third‑quarter results posted revenue of $50 billion, above analysts’ consensus, and earnings per share topped expectations, prompting a near‑17% jump in pre‑market trading that later settled around a 15% gain【2】. The company attributed the outperformance to strong demand and pricing power for AI‑focused memory chips, a narrative echoed by analysts who said the results “reinforce a constructive view on memory’s role in AI”【2】. The boost helped lift the Dow, which rose 0.65% despite weakness in several mega‑cap names, and gave the Nasdaq a modest 0.24% gain after earlier losses in high‑growth tech stocks.

Inflation data tempers market enthusiasm

The Commerce Department released the PCE price index showing a seasonally adjusted 4.1% annual inflation rate, matching the Dow consensus estimate but marking the highest reading since April 2023【2】. Core PCE, which strips out food and energy, rose 3.4% year‑over‑year, also the highest since October 2023【2】. The monthly PCE increase of 0.4% was 0.1 percentage point below expectations, providing a mixed backdrop: inflation remains elevated but the monthly pace missed forecasts, limiting broader equity gains. Energy prices continued to fall, further supporting the Dow’s record‑high level of 52,500 reported by Trading Economics【3】.

Sector divergence and broader market context

While memory‑chip makers rallied, hyperscale cloud providers such as Nvidia, Oracle, Amazon, Alphabet and Microsoft each slipped more than 2%, reflecting a shift in investor focus from software‑centric AI names to hardware infrastructure providers【3】. Apple fell 6.5% after announcing price hikes for iPad and Mac products amid rising memory costs, underscoring the ripple effect of the memory‑chip market on consumer‑tech pricing【3】. Banking stocks rose as lenders prepared to increase dividends following a successful Federal Reserve stress‑test, adding further support to the Dow’s advance【3】.

What to watch

• The Federal Reserve’s next policy meeting (scheduled for July 2026) and any guidance on future inflation expectations.
• Upcoming durable‑goods orders data, which showed a 4.5% decline in May and could signal shifts in corporate spending on AI‑related equipment.
• Quarterly earnings reports from other AI‑related hardware firms, especially those with exposure to memory‑chip pricing trends.

Micron’s earnings highlight that demand for AI‑driven memory remains robust, but the elevated PCE inflation reading reminds investors that price pressures persist, keeping the market’s direction dependent on forthcoming data and policy cues.