As of 12:00 Germany time (CEST, UTC+2)
TL;DR: Global technology shares rallied on Thursday after Micron and Qualcomm delivered stronger earnings and forecasts, easing concern that the AI trade had outrun its fundamentals. Oil fell back to pre-conflict levels and bond yields eased, but the dollar remained close to a 13-month high ahead of U.S. PCE inflation data.
In Asian Equity Markets semiconductor-heavy markets rebounded sharply after Micron reported $22 billion of committed customer agreements for memory chips and Qualcomm projected substantial growth from its data-cententre business. Japan's Nikkei gained more than 4 percent and South Korea's KOSPI rose around 5.5 percent, recovering much of the ground lost during this week's positioning unwind. The results gave investors the evidence they had been waiting for: AI demand remains strong enough to support pricing and multi-year capacity commitments. Elevated valuations have not gone away, but earnings are carrying more weight than positioning fears today.
In European Equity Markets technology shares led the market higher. The pan-European STOXX 600 gained around 0.5 percent, while the technology sector rose roughly 2.4 percent. Infineon, STMicroelectronics, BE Semiconductor and ASML advanced between approximately 4 and 6 percent as the stronger U.S. chip forecasts spread through the global supply chain. Lower oil also helped the regional backdrop by easing pressure on inflation, consumers and industrial margins. H&M moved lower after missing profit expectations, showing that the improved market tone did not cover weaker company-level execution.
In U.S. Equity Markets futures pointed to a technology-led rebound. Nasdaq 100 futures rose around 2.2 percent and S&P 500 futures gained roughly 0.8 percent, while Micron climbed about 18 percent in pre-market trading and Qualcomm advanced around 12 percent. Micron's results addressed the immediate concern around memory demand, customer commitments and the durability of AI infrastructure spending. The wider market still needs breadth beyond a handful of chip companies, particularly with valuations high and inflation data due later in the session.
In Commodities Markets oil extended its decline as more stranded tankers exited the Strait of Hormuz and Gulf exports continued to recover. Brent fell around 1.2 percent to roughly $72.80 per barrel, while WTI traded near $69.36. Brent has now erased its entire conflict-related rise and is down around 10 percent this week. The physical improvement is doing more for the inflation outlook than diplomatic headlines alone: vessels are moving, supply is returning and the market is removing the scarcity premium that built during the blockade.
In Currency Markets the U.S. dollar remained close to a 13-month high despite lower oil and falling longer-term yields. The dollar index traded around 101.5, the euro held near $1.1367 and the yen weakened toward 161.8 per dollar. Investors are still betting that persistent U.S. inflation will force the Federal Reserve to raise rates at least once this year. The yen is close to the area where intervention becomes increasingly likely, with traders watching the 162 level after earlier efforts by Japanese authorities failed to produce a lasting recovery.
In Bond Markets government bonds retained most of Wednesday's rally as falling oil reduced inflation pressure. The U.S. 10-year Treasury yield was little changed after declining more than 9 basis points in the previous session, while Germany's 10-year yield has fallen around 11 basis points this week. The front end remains less relaxed. The U.S. 2-year yield is near 4.15 percent as markets price one Federal Reserve hike and roughly even odds of a second before year-end. Thursday's PCE report will determine whether the bond rally can continue or whether short-term rate expectations tighten again.
The Cross-Asset Read
Micron gave the chip trade something it badly needed: hard evidence that demand is keeping pace with the spending.
The $22 billion of customer commitments matters more than another optimistic comment about AI. It points to real purchasing plans, supports memory pricing and gives suppliers better visibility into future capacity. Qualcomm's data-centre forecast added breadth to the message.
The macro backdrop also improved. Brent is back near $73, tanker traffic through Hormuz is recovering and longer-term bond yields have eased. That removes two of the pressures that made this week's semiconductor selloff so violent.
The dollar and the short end of the Treasury curve are still holding the market back. Core PCE is expected to remain well above the Fed's target, and traders are already pricing additional tightening.
The useful level remains the U.S. 2-year yield. Holding below 4.20 percent after the inflation report would give the earnings-led rebound room to broaden. A sustained move above 4.25 percent would put financing costs and elevated technology valuations back at the centre of the discussion.
Micron has repaired the earnings case. PCE now decides how much the market is willing to pay for it.
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