American equity indices ended Thursday on an uneven footing, reflecting a tension between strong sector-level earnings and persistent macroeconomic headwinds.
Indices and technology stocks
The Dow Jones Industrial Average edging 0.1% higher, while the S&P 500 finished broadly unchanged and the Nasdaq Composite fell 0.5%. The drag came predominantly from large-cap technology names. Apple led the declines after raising prices on iPads and MacBooks to offset higher component costs, while Nvidia, Microsoft and Alphabet also traded lower. Investors increasingly questioned whether the scale of AI infrastructure investment can translate into near-term earnings growth at the pace already priced into these valuations.
Semiconductors, however, told a different story. Micron Technology surged after reporting record results and securing $22 billion in customer commitments for memory chips, briefly pushing its market capitalisation past both Meta Platforms and Tesla to reach approximately $1.4 trillion. Sandisk shares also rallied following a Citi price target upgrade that cited strengthening NAND pricing and tighter supply, helping lift the broader semiconductor index to another strong quarterly performance.
By Friday morning, US stock futures retreated further as reports suggested OpenAI could postpone its stock market debut until 2027, choosing to pursue a $1 trillion valuation rather than list at a lower figure sooner. The Trump administration has also requested a phased release of GPT-5.6 over security concerns, with access initially limited to selected partners under government oversight. The combination of AI valuation concerns, persistent inflation and the prospect of higher interest rates continuing into the second half of 2026 weighed on futures across all three major indices.
US economic data
A set of economic releases published on Thursday painted a picture of a resilient but still-inflationary US economy. First-quarter GDP growth was revised upward to an annualised rate of 2.1%, supported by stronger business investment and a smaller drag from imports. Consumer spending within the same reading was, however, revised lower.
On the inflation front, headline PCE (Personal Consumption Expenditures) rose to 4.1% year-on-year, with the core measure also edging higher. May’s monthly core PCE came in at 0.3%, with the annual reading at 3.4%, still well above the Federal Reserve’s 2% target. Markets interpreted May as a potential near-term peak for inflation, a reading that offered some relief to equity and Treasury markets and contributed to modest softness in the US dollar.
Bond yields eased marginally during the session, and lower crude oil prices offered a degree of hope that headline inflation pressures could moderate over the coming months. Nevertheless, market participants broadly expect the Federal Reserve to maintain a restrictive policy stance and retain the possibility of further rate increases should price pressures prove persistent into the second half of 2026.
European equities
European shares had a notably stronger session, with the broader market closing at an all-time high.
STOXX and sector performance
The STOXX Europe 600 advanced 0.8% to reach a record closing level, with the Euro STOXX 50 matching that gain. Technology stocks led the rally as renewed confidence in artificial intelligence demand lifted key European names. ASML, Infineon and Siemens Energy were among the primary beneficiaries as investors rotated back into growth-oriented European industrials and semiconductor-adjacent businesses.
European banking names also performed well, with BNP Paribas and BBVA both ending higher. The standout mover of the session was Bayer, which surged nearly 20% after the United States Supreme Court ruled that federal pesticide law pre-empts state-level failure-to-warn claims relating to Roundup. The ruling overturns a $1.25 million jury award and could materially reduce the company’s exposure to future glyphosate-related litigation, a legal overhang that has weighed heavily on the stock for several years.
Asian markets
Asian equity markets finished the week on the back foot, with South Korea and Japan leading declines following a strong run for technology stocks.
Regional market moves
South Korean and Japanese indices fell as investors locked in gains from the week’s technology-driven rally. Concerns over the rising cost of AI infrastructure and the risk of stretched valuations in the semiconductor and chipmaking sectors led to broad-based profit-taking. Chinese markets also weakened, while Australia was broadly flat and Thailand posted modest gains.
Currencies
EUR/USD and Federal Reserve expectations
The US dollar stabilised on Friday after a muted reaction to the latest PCE inflation data, though it remained on track for a modest weekly gain as markets continued to factor in the prospect of further Federal Reserve rate increases. Against the euro, the dollar traded with EUR/USD hovering around 1.1368. The euro found some support as softer inflation readings in Europe tempered near-term pressure on the single currency, even as the broader dollar outlook remained constructive while US rates stay elevated.
Oil markets
Crude prices and Middle East supply
Crude oil prices slipped on Friday and looked set to record a third straight weekly loss. The primary driver of this weakness was improving tanker traffic through the Strait of Hormuz, alongside growing optimism that a US-Iran agreement could bring greater stability to regional energy supply. A separate cargo ship attack in the region served as a reminder that security risks had not fully dissipated, but the prevailing sentiment was one of gradually easing supply disruption. Lower energy prices, if sustained, would represent a meaningful tailwind for inflation and could reduce pressure on central banks to tighten policy further.
Equities on the move
The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:
Technology and semiconductors
OpenAI is reportedly evaluating a delay to its stock market listing until 2027, preferring to target a $1 trillion valuation over a swifter but lower-value debut. The Trump administration has requested a phased release of GPT-5.6 over security concerns, with access initially limited to selected partners under government oversight.
Samsung Electronics and SK Hynix are expected to announce major long-term investment plans at a South Korean government event next week. Samsung may commit more than 1,000 trillion won across a decade, reinforcing the country’s strategic ambitions in advanced semiconductors and AI hardware, despite weaker share prices.
Micron Technology delivered record quarterly results, announced $22 billion in forward customer commitments for memory chips and saw its valuation briefly surpass those of Meta Platforms and Tesla. Susquehanna upgraded the stock and raised its price target to $2,000, pointing to long-term customer contracts, high-margin DRAM and NAND pricing, and strong free cash flow growth prospects from the AI and data centre expansion cycle.
Applied Materials shares advanced after the company unveiled six new chipmaking systems targeting DRAM production and advanced AI chip packaging. The launch followed Micron’s strong print and added to the positive momentum across the broader memory and semiconductor complex.
Sandisk shares surged following a Citi price target upgrade linked to stronger NAND pricing and supply tightness, with the analyst pointing to AI-driven demand persistence through 2027.
IBM unveiled a sub-1 nanometre chip architecture featuring a 0.7nm transistor design and close to 100 billion transistors on a fingernail-sized chip. The design is expected to deliver up to 50% higher performance or 70% greater energy efficiency compared to IBM’s existing 2nm technology.
Consumer and hardware
Apple raised prices on Macs, iPads and home devices by between $100 and $300 to absorb higher memory and storage costs tied to AI-driven component demand. Shares fell 5%. Wedbush retained its Outperform rating, arguing the company’s premium customer base and supply chain positioning should preserve margins and long-term growth.
Microsoft announced it will raise Xbox console prices from 1 August 2026, with 512GB models increasing by $100 and 1TB versions by $150. The 2TB model will be discontinued. Microsoft cited elevated memory and storage costs and said it would expand financing and refurbished console options to maintain accessibility for customers.
Automotive
Stellantis and Nissan Motor are said to be in separate discussions to acquire parts of Marelli Holdings, the Japanese automotive supplier that filed for Chapter 11 bankruptcy in June. Stellantis is reportedly focused on Marelli’s suspension operations, while Nissan is interested in its cockpit operations.
Healthcare and consumer staples
Bayer surged about 19% following the US Supreme Court decision on Roundup-related litigation. The ruling pre-empts state-level failure-to-warn claims under federal pesticide law, overturning a $1.25 million jury award and raising hopes that the company’s long-running legal exposure may be substantially reduced.
L’Oréal was upgraded to a buy rating by Citi, with the bank raising its price target from €375 to €435. Analysts cited expectations for accelerating organic sales growth from 2027, supported by the integration of Kering Beauty assets including Creed and Gucci Beauty. Citi sees fading investor concerns and improved margin visibility supporting a valuation re-rating.
Financial services and software
BlackBerry raised its annual revenue forecast, crediting strong performance from its QNX automotive software business and its secure communications segment. QNX revenues grew sharply and the company reported a significant order backlog, reflecting rising demand for software-defined vehicles. Shares surged around 19–20% on the announcement.
Barclays remains overweight equities for the third quarter, lifting its S&P 500 year-end target to 7,800. The bank favours technology, industrials and utilities, is cautious on government bonds and flags the risk of higher Treasury yields and increased volatility as monetary policy becomes less predictable.
Microsoft also faced a negative analyst note from Stifel, which cut its price target to $400 over concerns that Azure’s rapid growth is compressing cloud margins. Stifel forecasts weaker-than-consensus gross margins for fiscal 2027, citing heavy AI capital expenditure, rising costs and limited scope to reduce expenses.
Upcoming economic events
Investors will be watching the US goods trade balance report and the latest University of Michigan consumer sentiment readings later today. Both data points will offer a read on trade activity and household confidence heading into the summer. Federal Reserve officials are also scheduled to speak, with markets attentive to any signals on the trajectory of interest rate policy. The weekly Baker Hughes rig count and CFTC Commitments of Traders data will round out a busy end to the trading week.
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