Asian stocks experienced a significant boost as US futures climbed, driven by Micron Technology's impressive quarterly sales forecast. The Nasdaq 100 futures rose nearly 2%, while the S&P 500 futures increased by 0.5% in response to Micron's performance, which exceeded Wall Street expectations and highlighted robust AI-driven growth.
South Korea's Kospi benchmark surged almost 5% in early trading, and the broader MSCI Asia Pacific Index jumped over 1%. The positive sentiment was further supported by a decline in oil prices, with Brent crude falling more than 4% in the previous session, closing below $74 a barrel. This decline was attributed to signs of increased supply and progress in US-Iran peace talks.
Micron's strong results come at a crucial time for the AI trade, as chipmakers and technology stocks faced pressure earlier in the week. Alongside Samsung Electronics Co. and SK Hynix Inc., Micron has benefited from the data-center spending boom, with demand for memory chips continuing to outpace supply.
“Micron far exceeded analyst expectations and, crucially, forecast robust future chip demand.”
Kyle Rodda, Analyst at Capital.com
SK Hynix announced plans for a US stock listing, seeking approximately $29 billion to capitalize on the growing demand for advanced memory products. The company's shares surged as high as 11% in early Asian trading, reinforcing optimism in the sector.
The rally in Treasuries saw the 10-year yield drop 11 basis points, while the 30-year yield touched 4.85%, the lowest since April 8. The two-year yield, closely tied to Fed policy expectations, slipped to about 4.15%. These moves indicate a reassessment of the Federal Reserve's interest-rate path, with traders previously betting on a potential hike next month.
“Micron’s earnings overnight have reminded investors that the durability of the memory cycle and broader AI trade is here to stay.”
Hugh Lam, Investment Strategist at Betashares
Background
Micron's results have arrived at a pivotal moment for the AI trade, with chipmakers and other technology stocks under pressure earlier this week. Along with South Korea’s Samsung Electronics Co. and SK Hynix Inc., Micron has been a major beneficiary of the data-center spending boom.
As the market digests Micron's results and the broader implications for the tech sector, investors will be closely watching the Federal Reserve's upcoming price index release for further insights into inflation trends and monetary policy direction.
