Nasdaq 100. Forecast: NDX jumps as Micron technology revives the AI trade

US futures                                          

Dow futures 0.25%, S&P futures 0.7%  & Nasdaq futures 2.2%

In Europe                                                                        

FTSE 0.94% & DAX 1.1%

• U.S stocks jump, led  by a rebound in tech
• Micron and Qualcomm impress, reviving the AI trade
• Core PCE rises to 3.4%, up from 3.3% and in line with forecasts
• Oil falls as traffic in the Strait of Hormuz picks up

U.S. Stocks Jump as Micron Revives AI Rally Despite Sticky Inflation

U.S. stocks are jumping on Thursday after strong earnings and guidance from Micron Technology and Qualcomm revived confidence in the AI trade, overshadowing another rise in U.S. inflation.

Concerns that AI-related valuations had become stretched triggered a sharp sell-off earlier this week, with the Nasdaq falling 3.3% on Tuesday as investors questioned whether massive AI spending would translate into profits.

However, Micron's results have helped shift the focus back to earnings. The strength of the numbers suggests AI-related demand remains robust, supporting the view that the recent sell-off was more a valuation reset than the start of a broader downturn in the sector.

The rally is overshadowing U.S. Core PCE data, which came in line with expectations. The Fed's preferred inflation gauge rose 3.4% year-on-year in May from 3.3%, while the monthly reading remained at 0.3%.

Meanwhile, U.S. GDP was revised higher to an annualised 3.6% from 3.5%, reinforcing the view that the U.S. economy remains resilient despite higher interest rates.

Corporate Movers

Micron Technology is soaring 18.5% after its fiscal Q3 results comfortably beat expectations. EPS came in at $25.11 versus forecasts of $20.78, while revenue surged to $41.46 billion from $9.3 billion a year ago, well above expectations of $35.85 billion.

Qualcomm is up 11% after doubling its 2029 non-handset revenue forecast to $40 billion from $22 billion previously. The company also forecast $15 billion in data-centre revenue, reinforcing confidence that AI demand is broadening beyond GPUs.

Memory stocks are also rebounding, with SanDisk rising 15% and Western Digital gaining 13%.

IBM is trading 3% higher after unveiling chip technology capable of producing processors smaller than one nanometre, potentially supporting the next generation of AI computing and cloud infrastructure.

Nasdaq 100 Forecast – Technical Analysis

After running into resistance at 30,650, the Nasdaq pulled back to find support at the rising trendline and the 50 SMA around 28,960 before rebounding.

The long lower wick on yesterday's candle suggests buyers stepped in at lower levels, indicating dip-buying demand remains intact.

Buyers will look to break above 30,000 before targeting 30,650, the near-term trendline resistance. A move above this level would create a higher high and expose 30,750 and fresh record highs.

Support is seen at 28,960, where the 50 SMA and yesterday's low converge. A break below this level would expose 28,200, the June low.

FX Markets – USD Holds Firm

The U.S. dollar remains close to a 13-month high as hawkish Fed expectations continue to outweigh the improvement in geopolitical sentiment following progress in U.S.-Iran talks.

EUR/USD is little changed around 1.1350 as falling oil prices reduce inflation risks for the Eurozone, prompting investors to question how much further the ECB will tighten after this month's rate hike.

GBP/USD is falling towards 1.3150 amid broad U.S. dollar strength and ongoing political uncertainty in the UK. The lack of clarity over the economic policies of the likely next Prime Minister, Andy Burnham, together with the growing policy divergence between the Fed and the Bank of England, continues to weigh on sterling.

Oil Continues to Ease as Supply Outlook Improves

Oil prices are falling further on Thursday, trading at their lowest levels since before the Middle East conflict began as improving supply prospects outweigh demand concerns.

The resumption of traffic through the Strait of Hormuz, together with increased Iranian exports under the temporary U.S. sanctions waiver, has eased fears of supply disruption.

The market is increasingly focused on how quickly Gulf producers can restore exports rather than the risk of further disruption. If supply continues to recover while demand remains subdued, oil prices could remain under pressure through the second half of the year.