Wall Street Rebounds After Strong Micron Earnings
Global markets experienced a positive shift following Micron Technology's stronger-than-expected quarterly results, which bolstered confidence in AI infrastructure and semiconductor demand. The Nasdaq 100 futures rose approximately 1.8%, while S&P 500 futures increased by 0.5%. In Asia, South Korea's KOSPI index surged by as much as 7% at its peak during the trading session. European equity futures also indicated a higher opening, with Germany's DE40 index advancing by 0.4%.
Micron's Earnings Report
Micron's shares soared by 15% in after-hours trading after the company reported fiscal third-quarter results that significantly exceeded market expectations. The company posted adjusted earnings per share (EPS) of $25.11, surpassing the consensus estimate of $20.49, and revenue of $41.46 billion, well above the anticipated $35.69 billion. Micron's guidance for the fourth quarter was also robust, forecasting adjusted EPS of $30–32 against a market consensus of $25.31, and projected revenue of $49–51 billion compared to expectations of $43.24 billion.
The company's gross margin expanded to 84.9%, exceeding both its previous guidance of 81.8% and the market consensus of 83.6%. Notably, the Cloud Memory segment generated $13.77 billion in revenue, significantly higher than the expected $10.69 billion, while Core Data Center revenue reached $11.52 billion, far exceeding the consensus estimate of $6.88 billion. Management highlighted strong customer demand, which supports an optimistic outlook for future quarters. Additionally, Micron declared a quarterly dividend of $0.15 per share.
Market Sentiment and Economic Indicators
Market sentiment was further supported by a decline in oil prices, with crude oil falling to around $72 per barrel, alleviating some inflation concerns and enhancing risk appetite. Gold prices stabilized near $4,000 per ounce after briefly dipping below that level, influenced by a stronger U.S. dollar and expectations of prolonged elevated interest rates.
The Federal Reserve released the results of its annual stress tests, indicating that the largest U.S. banks are well-capitalized and capable of withstanding a severe economic recession. Although hypothetical aggregate losses could exceed $700 billion, capital ratios would remain comfortably above regulatory minimums. The Fed also announced planned changes to its stress-testing methodology to reduce volatility in capital requirements.
Technological Developments
In the tech sector, Meta is expanding its partnership with Qualcomm, planning to deploy Qualcomm's C1000 processors in its data centers starting in 2028. Qualcomm's shares rose over 12% in after-hours trading following this announcement. Additionally, AI startup SambaNova secured new funding, reportedly raising its valuation to $10 billion.
In a notable controversy, AI company Anthropic accused Alibaba of unauthorized access to its AI models, a claim that Alibaba has denied. Investors in China are also closely monitoring the government's plans to issue up to €5 billion in sovereign bonds, alongside new measures from the People's Bank of China to enhance short-term liquidity management.
Technical Analysis
Following Micron's earnings report, the US100 index moved above the 50-period EMA and is currently testing the 200-period EMA on the hourly chart. A sustained breakout from these levels could increase the likelihood of a move toward all-time highs, which remain over 700 points away.