Today’s Market Recap: AI Trade Reignited, Micron and Qualcomm Signal Strong Chip Demand

Tracking Market Trends

TradingKey - On June 24, Eastern Time, the three major US stock indexes closed mixed. The market continued to digest high AI valuations, capital expenditure pressures on tech giants, and expectations of another Fed rate hike later this year. A sharp pullback in oil prices eased inflation concerns, boosting the aviation, travel, industrials, and discretionary consumer sectors, while tech stocks remained under pressure, dragging the Nasdaq and S&P 500 slightly lower.

At the close, the Dow Jones Industrial Average rose 0.35% to 51,854.17 points; the Nasdaq Composite Index fell 0.43% to 25,476.64 points; and the S&P 500 Index fell 0.10% to 7,358.21 points.

In terms of sectors and individual stocks, tech stocks were generally weak. Microsoft ( MSFT) fell over 2%, Nvidia ( NVDA ), Apple ( AAPL ), Alphabet ( GOOGL) closed slightly lower; Qualcomm ( QCOM) closed down over 3%. AI chip newcomer Cerebras ( CBRS) slumped 19.6% after its full-year gross margin guidance came in lower than Q1 levels, sparking market concerns over the quality of earnings for AI chip companies.

The semiconductor sector received a key post-market catalyst. Micron Technology ( MU) closed slightly lower during regular trading hours, but its shares surged over 15% after hours following the release of strong earnings and guidance. The company's third-quarter revenue reached $41.46 billion, with adjusted earnings per share of $25.11, both beating market expectations, and indicated that the AI-driven supply crunch for memory chips could persist beyond 2027.

In commodity markets, oil prices continued to fall sharply. Concerns over crude supply disruptions cooled as transit through the Strait of Hormuz improved and more tankers sailed out. Brent crude spot closed down 4.7% at $73.37 per barrel, while WTI ( USOIL) crude spot fell 4.35% to close at $69.86 per barrel. In precious metals, a stronger US dollar and rising expectations of Fed rate hikes weighed on gold prices. Gold ( XAUUSD) continued its pullback to approach a two-week low, briefly dropping below $4,000 during the session to hit a low of $3,959.14.

Market Headlines

Micron Technology's earnings report has bolstered market confidence in AI memory demand. The company stated that customers have committed $22 billion to secure future memory chip supplies, with remaining performance obligations of approximately $100 billion. Micron also expects capital expenditures of around $10 billion for the fourth fiscal quarter, higher than market expectations, indicating that demand for AI servers and high-bandwidth memory remains tight.

Cerebras' first post-IPO earnings report has sparked mixed reactions in the market. While the company's partnerships with clients such as OpenAI and AWS continue to progress, its full-year gross margin guidance was lowered to 38%–41%, significantly below the 47% level in the first quarter, and far below the gross margins of established chipmakers like Nvidia and AMD. Meanwhile, OpenAI's announcement of its self-developed inference chip, Jalapeño, has also heightened investor concerns over the competitive landscape of AI chips.

Alphabet will be added to the Dow Jones Industrial Average, replacing Verizon. The change will take effect on June 29, marking a further shift in the Dow's weighting toward technology and communication services. Although Alphabet closed slightly lower today, its inclusion in the Dow will help boost its representation in the traditional blue-chip index.

Jensen Huang declares the dawn of the AI factory era. Nvidia CEO Jensen Huang stated at the shareholder meeting that AI data centers are becoming "AI factories manufacturing tokens," which can be converted into code, answers, designs, and services, thereby generating revenue. He emphasized that "useful AI has arrived and is already profitable," addressing market skepticism regarding the return on investment of AI capital expenditures.

Qualcomm accelerates its push into AI data centers. Qualcomm expects data center chip sales to reach $15 billion by 2029 and stated that revenue from this business is projected to reach $5 billion in fiscal year 2027. Meta will adopt its Dragonfly C1000 data center CPU, and Microsoft will also deploy its HBC chips, demonstrating that Qualcomm is accelerating its entry into the AI inference chip market.

On the macro front, investors continue to monitor the Federal Reserve's policy path. CME FedWatch shows that traders are ramping up bets on a second Fed rate hike this year. The upcoming U.S. PCE price index on Thursday will be a crucial data point for assessing inflationary pressures and the interest rate outlook.

Top 10 most active stocks

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