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Update: US Equity Indexes Mixed as Tech Bulls Whistle Past Micron's Blockbuster Results, Inflation Surges to Three-Year High
(Updates with index/price moves, macroeconomic data, and company/political news from the first paragraph.)US equity indexes traded mixed after strong quarterly results from the $1.4 trillion market-cap Micron Technology (MU) failed to lift technology, and as the annual inflation rate surged to its highest level in more than three years.The Nasdaq Composite fell 0.5% to 25,338.8 after midday Thursday. The S&P 500 slipped by less than 0.1% to 7,354.5, giving up intraday gains. The Dow Jones Industrial Average rose 0.3% to 52,022.6, off session highs. Communication services and consumer discretionary led the decliners, while industrials and health care were standout gainers.In company news, Micron Technology (MU) shares rose nearly 16%, among the top gainers on the S&P 500 and the Nasdaq, after the company reported fiscal Q3 adjusted earnings and revenue that topped estimates, with Q4 guidance also beating consensus. Shares jumped more than 19% earlier in the session.In economic news, annual inflation accelerated to 4.1% in May, the fastest print since April 2023, matching consensus, based on the personal consumption expenditures, or PCE, price index data from the Bureau of Economic Analysis. It follows a 3.8% gain in April. Core PCE inflation, which strips out food and energy, accelerated to 3.4% from a year ago, as expected, from 3.3% in April. That's the highest reading since October 2023.On a month-on-month basis, inflation held steady at 0.4% in May, slower than the 0.5% consensus. Core PCE was unchanged at 0.3%, in line with market expectations."PCE price inflation remains too high and will keep the [Federal Reserve] on hold and mulling a potential rate hike at upcoming meetings," Scott Anderson, chief US economist at BMO, said. "On the bright side, a lot of the goods price inflation seemed to be driven by the energy complex, so as energy prices drop this source of inflation pressure should fade."While the probability of two interest rate increases by December remains elevated, the likelihood slipped to 29% following the PCE data, versus 31% on Wednesday, according to the CME FedWatch tool. There is only a 21% chance that the target rate for fed funds will remain in the 3.5% to 3.75% range by the end of this year.Most US Treasury yields declined, with the 10-year down 1.4 basis points to 4.39%. The two-year rate dropped 2.6 basis points to 4.11%.Gold futures jumped 0.9% to $4,045.20, and silver futures climbed 0.5% to $58.83.Further in economic news, gross domestic product rose by 2.1% in Q1, revised up from a 1.6% jump in the second estimate, above expectations for no revision in a Bloomberg-compiled survey. Sequential economic growth was 0.5% in Q4.In geopolitical news, Iran's Islamic Revolutionary Guard Corps has warned commercial vessels to only use routes through the Strait of Hormuz approved by Tehran, reopening a point of friction in fragile negotiations between the United States and Iran over the future of the strategic waterway, Al Jazeera, a Middle East news broadcaster, reported on Thursday.The warning came after Oman announced a new shipping transit route through the strait on Wednesday, saying it had coordinated the route with the International Maritime Organization as maritime traffic slowly resumes following weeks of disruption, the news report said.Meanwhile, Israel will continue occupying areas of Lebanon, Syria, and Gaza, rejecting pressure to withdraw from territory its military has seized, Israeli Defence Minister Israel Katz was cited as saying in a separate Al Jazeera report.The front-month global benchmark North Sea Brent rose 1.5% to $74.86 per barrel, and the US West Texas Intermediate climbed 1.7% to $71.56 per barrel, rebounding after touching pre-Iran war levels recently.Further in company news, Bio-Techne (TECH) has signed a definitive agreement to be acquired by Merck KGaA for $73 a share, representing an enterprise value of $11.3 billion, the companies said Thursday. Bio-Techne shares soared 20%, the top gainer on the S&P 500.
Dow JonesNasdaq CompositeS&P 500$MU$TECH
