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Nasdaq, S&P 500 Log New Peaks as Micron Drives Tech Rally

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Nasdaq, S&P 500 Log New Peaks as Micron Drives Tech Rally

The Nasdaq Composite and the S&P 500 reached new peaks on Tuesday, driven a Micron Technology (MU) led rally in the tech sector, while the Dow Jones Industrial Average retreated from a record high.

The Nasdaq rose 1.2% to settle at 26,656.2, while the S&P 500 climbed 0.6% to 7,519.3 -- both notching new record finish. The Dow fell 0.2% to 50,461.7, after closing at a record high in the previous session.

Six of the 11 sectors ended in the green, led by tech's 1.7% advance, while energy saw the steepest decline.

US markets were closed Monday for the Memorial Day holiday.

Micron shares surged 19%, the best performer on the S&P 500, as UBS Securities boosted it price target on the semiconductor manufacturer's stock to $1,625 from $535.

Micron's market capitalization crossed the $1 trillion mark for the first time.

Micron's valuation should get a further boost from long-term agreements in the memory industry, UBS said Tuesday.

On Semiconductor (ON) shares jumped 9%, the second-top gainer on the S&P 500. Western Digital (WDC) shares climbed 8.3%, also among the biggest gainers on the index.

Some 95% of S&P 500 companies have reported their quarterly financial results in the latest cycle, with earnings up about 28% from a year earlier and revenue rising 11.1%, Oppenheimer Asset Management said in a note.

Ahead of the earnings season, FactSet put expected earnings growth at 12.6% year over year, according to the brokerage.

"The (first-quarter) earnings season rolled on, with many firms reporting strong results and positive guidance," Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus said. "Bears, skeptics, and nervous investors have been able to take some profits without (the fear of missing out) within what appears to us a bull market that persists having legs to run further."

Costco Wholesale (COST), Marvell Technology (MRVL), Salesforce (CRM), and Dell Technologies (DELL) are slated to report results this week.

West Texas Intermediate crude oil was down 3% at $93.72 a barrel in Tuesday late-afternoon trade, while Brent rose 3.6% to $99.63.

Iran has a "legitimate" right to respond to any violation of a ceasefire by the US, CNN reported Tuesday, citing Tehran's Islamic Revolutionary Guard Corps. Earlier, the US military targeted Iranian missile launch sites and boats around the crucial Strait of Hormuz in what it described as "self-defense strikes," according to the report.

US President Donald Trump said Monday that negotiations with Iran were "proceeding nicely," but encouraged countries including Saudi Arabia and Pakistan to join the Abraham Accords, aimed at normalizing diplomatic ties with Israel.

"While an extended conflict with Iran remains the largest risk to continued market gains, in our view, markets are positioned for more progress on peace talks and the Strait of Hormuz reopening," D.A. Davidson said in a report Tuesday.

US Treasury yields were lower, with the 10-year rate last down 6.6 basis points at 4.5% and the two-year rate losing 7.7 basis points to 4.06%.

"Investors remain focused on whether energy markets stabilize or whether higher oil prices start feeding back into inflation expectations and bond yields again," Saxo Bank said in a report Tuesday.

Elbit Systems' (ESLT) first-quarter results rose year on year, while the company said its order backlog topped $30 billion, lifted by surging demand from Israel's Ministry of Defense amid ongoing regional conflicts. The company's US-listed shares advanced 11%.

AutoZone (AZO) shares plummeted 9%, the steepest decline on the S&P 500, after the auto parts retailer's fiscal third-quarter earnings topped market estimates, but revenue fell short.

In economic news, US consumer confidence fell in May amid mounting inflation concerns as the Middle East conflict has stretched for about three months now, a survey by the Conference Board showed Tuesday.

Separately, US annual home price growth decelerated in March, with more than half of the 20 major markets logging decreases, S&P Global (SPGI) division S&P Dow Jones Indices said Tuesday.

Gold was last down 0.3% at $4,508.30 per troy ounce, while silver rose 1.5% $77.35 per ounce.

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Micron Poised to Benefit From 'Enhanced' Long-Term Deals, UBS Says
US Markets

Micron Poised to Benefit From 'Enhanced' Long-Term Deals, UBS Says

Micron Technology's (MU) valuation should get a further boost from long-term agreements in the memory industry, UBS Securities said Tuesday, as the semiconductor manufacturer's market capitalization crossed the $1 trillion mark for the first time.The new "enhanced" LTAs include longer durations, fixed volume commitments and partially fixed pricing, compared with the prior periods that involved volume-based offtake deals, according to UBS analysts, including Timothy Arcuri.These LTAs are likely to cover 20% to 30% of the memory industry's double data rate -- or DDR -- bit shipments in 2027, the brokerage said. Hyperscalers have secured about 60% to 70% of the industry's Server DDR5 volumes under these agreements, it said."We believe the market will start to put a more 'normal' multiple on the stock and MU will continue to re-rate higher as more details emerge about the structural changes (artificial intelligence) has driven to the entire memory complex," Arcuri wrote. "These agreements will allow (Micron) to trade some near-term revenue for demand visibility and a smoother earnings profile."Shares of Micron were trading 21% higher in Tuesday afternoon trade, boosting its market cap above $1 trillion, Yahoo Finance data showed. The stock's valuation has more than tripled so far this year.UBS boosted its price target on Micron shares to $1,625 from $535, while reiterating its buy recommendation.UBS raised earnings-per-share estimates for Micron to $155 from $133 for calendar year 2027 and to $167 from $122 for 2028. Micron is expected to generate free cash flow of more than $400 billion from 2027 through 2029, according to the brokerage."Considering that investors typically reward stocks for durability and visibility, we see (Micron's) EPS remaining (more than) $100 through (calendar year 2029) as testament to the sort of lasting, structural change that should support a shift toward a broader semi multiple," Arcuri said.Price: $907.84, Change: $+156.84, Percent Change: +20.88%

$MU
March Annual Home Price Growth Decelerates as Housing Slowdown Deepens, S&P Says
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March Annual Home Price Growth Decelerates as Housing Slowdown Deepens, S&P Says

US annual home price growth decelerated in March, with more than half of the 20 major markets logging decreases, S&P Global (SPGI) division S&P Dow Jones Indices said Tuesday.The national S&P Cotality Case-Shiller Index rose 0.7% year over year in March without seasonal adjustments, down from a 0.8% increase the month prior. The 10- and 20-city composites increased 1.4% and 0.8%, respectively, in March. The measures slowed down from February's growth rates of 1.5% and 0.9%, respectively, according to the report."More than half of the 20 major US housing markets recorded year-over-year price declines in March, reflecting a broadening and deepening housing slowdown," said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. "With consumer inflation accelerating to roughly 3.3% in March, US home values have now fallen in real terms for the 10th consecutive month, underscoring an ongoing erosion of inflation-adjusted housing wealth."Markets in the Northeast and Midwest are sustaining "modest" growth in prices, while much of the Sun Belt and Western regions continue to see decreases, Godec said.Among the 20 cities, prices in Seattle fell 2.5% year over year in March, the steepest decline. Chicago logged the highest annual gain of 6.1%, followed by New York and Cleveland, the data showed.Sequentially, pre-seasonally adjusted national home prices increased 0.7% in March, compared with a 0.3% rise the month prior. The 10-city composite index was up 1.2%, while the 20-city composite increased 1%, the data showed. In February, the 10- and 20-city composites advanced 0.6% and 0.4%, respectively, according to the report."Monthly price movements offered a seasonal spring lift, but little underlying momentum," Godec said. "The 30-year fixed (mortgage) rate dipped below 6% in late February, but rebounded to roughly 6.4% by the end of March, re-intensifying the affordability squeeze on buyers and potentially further damping home sales and price growth."Separately, the Federal Housing Finance Agency said US home prices increased 0.1% sequentially in March. In the first quarter, prices rose 0.5% from the linking quarter and 1.7% annually, according to the report.Price: $413.10, Change: $-4.51, Percent Change: -1.08%

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Consumer Confidence Falls as Inflationary Concerns Intensify, Survey Shows
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US consumer confidence fell in May amid mounting inflation concerns as the Middle East conflict has stretched for about three months now, a survey by the Conference Board showed Tuesday.The consumer confidence index ticked down to 93.1 this month from April's upwardly revised reading of 93.8. The consensus was for a 92 print in a Bloomberg survey."Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified," Conference Board Chief Economist Dana Peterson said.On Friday, a University of Michigan survey showed that consumer sentiment declined to a fresh record low this month as people fear that high gasoline prices could erode their purchasing power.Gasoline prices in the US have surged as the Iran war pushed crude oil costs higher due to the effective closure of the Strait of Hormuz. Its been about three months since the conflict started on Feb. 28, though a fragile ceasefire between the US and Iran continues to hold."Consumers' write-in responses on factors affecting the economy continued to skew towards pessimism in May," the Conference Board's report said. "References to prices and oil and gas increased in frequency for a second consecutive month, while mentions of war, geopolitics, and conflict remained elevated -- likely signaling consumers' underlying concerns about the inflationary impacts of the war in the Middle East on their wallets."Consumers' one-year inflation expectations "ticked downward" this month, but remained elevated, according to the survey.The present situation measure dropped 3.2 points sequentially to 121.2, while the expectations component increased by one point to 74.4, the Conference Board said.Consumers' assessment of current business and labor market conditions were "moderately less positive" than last month, while their expectations six months from now showed "modest improvements," Peterson said.