Stock Market Shows Mixed Signals as AI Optimism Clashes with Hot Inflation Data

U.S. stock markets delivered mixed results on Thursday as strong earnings from chip manufacturer Micron Technology bolstered confidence in the artificial intelligence sector, while new inflation data raised concerns about Federal Reserve rate-hiking prospects. The S&P 500 rose 0.1%, the Dow Jones climbed 1.1%, and the Nasdaq Composite slipped 0.3%, reflecting the divergent forces at play. Micron's shares surged more than 10% following better-than-expected quarterly results and an upbeat growth outlook, signaling healthy demand for memory chips crucial to AI applications and helping to ease Wall Street worries about inflated valuations in the sector. Separately, semiconductor rival Qualcomm announced an expansion into data center products and set a $15 billion revenue target for AI-related offerings, with its stock rising approximately 5%. However, the Personal Consumption Expenditures Index—the Federal Reserve's preferred inflation gauge—showed prices rising 4.1% year-over-year in May, in line with expectations but still keeping the prospect of interest rate increases on the table. Oil prices provided some relief, falling back to levels unseen since the Iran conflict as supply resumed through the Strait of Hormuz, with Brent crude at $74 a barrel and West Texas Intermediate near $70. The conflicting signals underscore the market's ongoing tension between technology sector strength and macroeconomic uncertainty.