Micron Technology's robust revenue forecast has reignited optimism in the technology sector, driving a significant rebound in US equity futures after recent declines. Micron projected $50 billion in revenue for its fiscal fourth quarter, far surpassing analyst expectations of $43.2 billion to $43.58 billion, which led to a surge of nearly 16% in its shares during after-hours trading [1][2]. This positive outlook for semiconductors has fueled a broader rally in tech stocks, with Qualcomm also jumping 13% after raising its fiscal 2029 non-handset revenue target to $40 billion. The rally extended to other chipmakers such as SanDisk, Western Digital, and Marvell Technology [2].
The tech-driven momentum lifted major US index futures: Nasdaq 100 futures rose by 1.77% to 2.25%, S&P 500 futures climbed 0.53% to 0.80%, and Dow Jones futures advanced 0.15% [1][2]. This marks a turnaround from previous sessions where the Nasdaq 100 and S&P 500 had declined by 0.4% and 0.1%, respectively, while the Dow Jones managed a 0.34% gain [2]. Despite the rebound, the so-called 'Mag 7' tech stocks remain in correction territory, down 11.6% since their May 28 peak [1]. Nearly two-thirds of S&P 500 constituents advanced, and the equal-weighted S&P 500 index rose 0.71% [1]. Asian markets also responded positively, with the Nikkei up 4.10%, KOSPI up 5.73%, and CSI 300 up 1.61%, though the Hang Seng fell 1.38% [1].
Market sentiment, however, remains cautious as investors await the upcoming US Personal Consumption Expenditures (PCE) inflation report, the Federal Reserve's preferred inflation metric. Economists expect the headline PCE index to accelerate to 4.1% year-over-year in May from April’s 3.8%, with core PCE projected at 3.4% [2]. The CME FedWatch tool indicates that markets are pricing in an 83% probability of a rate hike by the end of December, reflecting expectations of tighter monetary policy following hawkish remarks from Fed Chairman Kevin Warsh [2].
According to NBC News, Wall Street forecasters anticipate the PCE report will show faster price growth in May, influenced by higher oil prices and stronger consumer spending [3]. Fed Chairman Warsh has reiterated the central bank's commitment to returning inflation to its 2% target, and markets now expect at least one rate hike by year-end [3]. However, with oil prices recently falling and the 10-year Treasury yield dropping by 9 basis points, some analysts suggest the Fed may have room for a more dovish approach, especially as the war in the Strait of Hormuz concludes and inflationary pressures potentially ease [3]. Citigroup analysts note that Warsh's creation of task forces to re-examine inflation measurement could introduce more flexibility into future policy decisions [3].
CONCLUSION
Micron's upbeat revenue guidance has sparked a broad-based rally in tech stocks and lifted global equity markets, but investor caution persists ahead of the key US PCE inflation report. With the Federal Reserve signaling a strong commitment to controlling inflation and markets anticipating further rate hikes, the interplay between robust tech earnings and monetary policy remains central to market direction. The outcome of the upcoming inflation data will likely shape both investor sentiment and Fed policy in the near term.