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Nasdaq extends sell-off as Micron overtakes Meta and Tesla by market cap

The PCE price index rose to a 4.1% annual rate for May

Proactive

4:15pm: Mixed finish

US stocks finished Thursday’s session mixed, as a more 6% drop in Apple shares over increased prices weighed on the tech-heavy Nasdaq. The index finished the day down 0.5% at 25,358 points. The S&P 500 was little changed at 7,357 points, while the Dow Jones added 0.1% at 51,920 points.

3:30pm: Proactive news headlines

2:45pm: Market movers

1:40pm: Apple raises prices

Apple Inc (NASDAQ:AAPL, XETRA:APC) (Apple Inc (NASDAQ:AAPL, XETRA:APC), Apple Inc (NASDAQ:AAPL, XETRA:APC)) shares fell more than 6% on Thursday after the company announced price increases across several MacBook and iPad models, marking its first formal move to pass rising memory and storage costs on to consumers amid intensifying AI-driven demand for components.

The decline represented Apple’s steepest single-day drop since April 2025, as investors reacted to both the scale of the price increases and the possibility of further adjustments ahead.

The company said it has “reached a point where we need to begin raising prices on a number of products,” adding that further increases remain possible.

Wedbush analysts described Apple’s move as a response to what it called a “memory storm,” noting that average selling prices for Mac computers rose roughly 15% to 20%, and iPads increased between 15% and 25%.

Apple’s online store was briefly taken offline Thursday morning before returning with updated pricing across its hardware lineup.

12:20pm: Micron shares at all time high

Micron Technology Inc (NASDAQ:MU) (Micron Technology Inc (NASDAQ:MU)) shares soared more than 15% to a record high of around $1,208 Thursday as analysts cheered a wave of long-term strategic agreements reshaping the investment case for the memory chipmaker.

Bank of America reiterated its Buy rating and lifted its price target to $1,550 from $1,500, while Wedbush maintained its bullish stance, with both firms pointing to Micron's growing portfolio of strategic customer agreements (SCAs) as a defining development for the sector.

Wedbush described the quarter as a "drop the mic" moment for Micron and the broader memory trade, saying the results demonstrated that demand for NAND and DRAM continues to significantly exceed industry supply.

"With greater nervousness around the AI trade... this shows the memory and chip trade is well-intact and still in the early stages of playing out," Wedbush said, adding that it sees no cracks in AI demand on the hardware or software front.

11:10am: Inflation stays high

The latest PCE inflation data offered a mixed picture, with the annual reading remaining elevated at 4.1%, while the monthly increase of 0.4% came in below expectations.

Analysts noted that inflation remains well above the Federal Reserve's 2% target, meaning markets are likely to continue pricing in interest rate hikes through Fed funds futures, a sharp shift from expectations of rate cuts less than six months ago.

"The first half of the year markets were able to overcome the headwinds of higher inflation and higher rate expectations because corporate profits were so outstanding, but it is going to be difficult to keep climbing higher as long as the Fed is poised to raise rates," said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.

"It’s our expectation that inflation will start going lower now that the Strait of Hormuz has reopened and oil prices are coming down, so that may alleviate some of the pressure on the Fed, but next month’s data needs to be lower than what we are seeing today if that is going to be the case."

10am: Nasdaq tumbles for fourth day

US tech stocks are down for the fourth day in a row, with the mood changing after the macro data was released earlier.

The Nasdaq has tumbled another 1.1% at the open, now down over 1,250 points or 4.8% so far this week.

The S&P 500 is down 0.4% so far this morning to 7,336.5, down 2.3% so far this week.

It's more positive for the Dow Jones, up 0.4%.

Micron is up 18% to top the Nasdaq 100 leaders, meaning it has overtaken Tesla and Meta Platforms in terms of market cap.

But at the other end, software and internet names have born the brunt of the selling, with AppLovin down more than 8%, with Apple plunging 5%, Palantir and Strategy both down over 4%, ARM, Amazon, Alphabet and Meta falling 2.7-2.2%, with Microsoft and Nvidia 1.8% and 1.45% lower.

9am: US data dump

US inflation increased last month, according to the PCE price index, which rose to a 4.1% annual rate for May, up from 3.8%.

The month-on-month measure came in lower than expected at 0.4% versus 0.5%.

Core PCE rose 0.3% and 3.4% year-on-year, both in line with the consensus forecast.

One item to flag is air transportation since this sector is feeling the burden from the energy crisis.

Personal spending rose 0.7% in May, up from 0.5% in April and ahead of expectations for 0.6%.

First-quarter GDP growth was revised up to an annualised 2.1% from 1.6%.

Meanwhile, initial jobless claims fell to 215,000, pointing to continued labour market strength, although continuing claims edged higher to 1.821 million.

Durable goods orders fell 4.5% in May, but the decline was less severe than economists had expected.

"The labor market is holding steady," says Jeffrey Roach, chief economist for LPL Financial. "Those continuing to claim unemployment benefits remain historically low."

On the inflation front, he says an encouraging signal is the 0.4% monthly increase in compensation to keep up with inflation.

"If the labor market holds, we expect consumers will have the ability to maintain spending patterns," he says.

"The real story is the amount of business investment as measured by shipments of capital goods during May and April. Given the growth trajectory, the Fed is rightly focused on price stability and will remain hawkish this summer.

"If the Iran crisis creeps into Labor Day timeframe, we have a much higher chance that inflation pressures will seep into other categories and will force the Fed’s hand."

7.45am:

US stocks look set for a strong rebound on Thursday, with technology shares leading the charge after upbeat results from Micron reignited enthusiasm for the artificial intelligence trade following three consecutive days of losses for the Nasdaq.

Nasdaq futures jumped 2.2%, pointing to a recovery after the technology-heavy index fell 0.4% on Wednesday, taking its decline for the week to more than 1,000 points, or 3.7%.

S&P 500 futures were up 0.8%, with Dow Jones futures 0.3% higher, having respectively dropped 0.1% to 7,358.2 and 0.35% to 51,848.9 the day before.

The mood shifted after Micron's fiscal third quarter results comfortably beat Wall Street expectations and the memory chipmaker issued stronger-than-expected guidance for the current quarter.

Revenue more than doubled from a year earlier, while chief executive Sanjay Mehrotra said the results reflected "the strategic value of memory in the AI era" as demand continued to accelerate.

The shares have leapt 17.5% in pre-market trading.

Market analyst David Morrison at Trade Nation said the results "restored confidence across a sector which has taken a recent hit", noting that the company is the only US manufacturer of high-bandwidth memory chips compatible with Nvidia's processors.

Qualcomm also boosted sentiment after buying a chip startup Modular for nearly $4 billion and issuing an upbeat forecast for its data centre business, helping lift semiconductor stocks including AMD, Marvell Technology, TSMC and Intel.

The optimism spread into Asian and European markets. Japan's Nikkei 225 surged 4.6%, South Korea's Kospi jumped 5.4% and the Euro Stoxx 600 technology index gained 0.7%.

Investors will also be watching US inflation data later, with the Personal Consumption Expenditures price index expected to show annual inflation of 3.4%. Morrison said the release would be closely watched as markets assess the Federal Reserve's increasingly hawkish stance.

Attention will also remain on the Japanese yen after the dollar climbed to within a few cents of ¥162, its strongest level against the currency since July 2024.

Traders were "still playing a game of chicken" with Japanese policymakers, Morrison said, after previous currency interventions failed to halt the yen's decline, although he cautioned the dollar could see a short-term pullback after its recent rally.

Oil prices continued to fall, with WTI crude sliding another 0.8% to $69.77, the lowest since the start of March.

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