Wall Street's leading stock indexes were set for an upward trajectory on Thursday, bolstered by the Nasdaq's rise following encouraging forecasts from tech giants Micron and Qualcomm, which reignited enthusiasm around artificial intelligence. Positive economic indicators also contributed to market sentiment.
Micron and Qualcomm highlighted substantial demand for AI-related infrastructure, with clients reportedly investing $22 billion in Micron's memory chips. Additionally, Qualcomm predicted a remarkable $15 billion in data center sales by 2029.
In premarket trading, Micron's shares surged by 18.3%, while Qualcomm experienced a 10.4% boost. Other companies in the memory chip sector, such as Sandisk, Western Digital, and Seagate Technology, saw increases ranging from 11.6% to 16%.
These developments provided renewed backing for a tech-focused rally that had recently lost momentum. Investors remain focused on chipmaker earnings to assess the sustainability of industry valuations amid ongoing scrutiny.
In other economic news, the Personal Consumption Expenditures (PCE) price index aligned with forecasts at 4.1%. Additionally, the final report on first-quarter GDP revealed a 2.1% growth rate, an improvement from the previously estimated 1.6%.
Market analyst Daniela Hathorn from Capital.com commented, "Market reactions seem to be centered on the month-on-month figures, which were slightly under expectations." She also noted that inflation remains a pressing concern, highlighted by comments from new Federal Reserve Chair Kevin Warsh, who emphasized the priority of addressing inflation and hinted at possible rate hikes if pressures continue.
Falling oil prices, now below pre-war levels, alongside resilient economic data, have sparked optimism that inflation could ease without resulting in increased interest rates.
As of 8:48 a.m. ET, the Dow E-minis were up by 173 points, translating to a 0.33% increase. The S&P 500 E-minis gained 62.25 points, or 0.84%, while the Nasdaq 100 E-minis rose by 703.75 points, marking a 2.38% uptick.
Concerns regarding debt-driven expenditures by major tech firms, along with apprehensions about a more aggressive Federal Reserve, have led to a downturn in the markets this week, particularly affecting tech stocks.
Micron and Qualcomm have both made impressive gains this quarter, with their respective shares rising over 200% and 50%. The Philadelphia SE Semiconductor Index is on track for its strongest quarterly performance yet, according to data from LSEG.
Despite positive movements, the Nasdaq is still headed for its most significant monthly decline since March 2025, while the Philadelphia semiconductor index is experiencing its most substantial weekly drop since the onset of the Middle East conflict earlier this year.
Recent statements from Fed Chair Kevin Warsh stressing the importance of controlling inflation have led traders to anticipate at least one rate increase before the end of the year. Additional remarks from New York Fed President John Williams and Chicago Fed President Austan Goolsbee will be analyzed later today.
In other notable market activity, Bio-Techne Corp saw a remarkable 19.4% increase after Germany’s Merck KGaA announced plans to acquire the biotech company for $73 per share in cash, valuing the deal at around $11.3 billion.
