The technology sector ended a shortened trading week on a positive note, with chip stocks powering the Nasdaq Composite to a 2.43% gain. Markets were closed Friday for the Juneteenth holiday and will resume regular trading on Monday, setting the stage for a data-heavy period ahead.
Semiconductor Rally Intensifies
The Philadelphia Semiconductor Index climbed approximately 7% for the week, reaching a fresh all-time high. The rally was concentrated in artificial intelligence infrastructure plays, with hardware stocks outperforming. Andy Pratt, investment strategy director at Burney Company, described the AI trend as still having “a lot of juice,” while Steve Kolano, chief investment officer at Integrated Partners, noted that chip demand is “just through the roof” relative to available supply.
Intel Surges on Apple Foundry Speculation
Intel shares soared 10.6% on Thursday after President Donald Trump stated that Apple had agreed to work with Intel on chip design and manufacturing in the United States. Neither Apple nor Intel immediately confirmed the remarks or provided additional details, and Trump did not specify which chips would be involved. If realized, such a deal could provide Intel’s foundry business with much-needed scale as it competes with Taiwan Semiconductor Manufacturing Co.
The broader S&P 500 technology sector rose 2.7% on Thursday, but beneath the surface the rally was narrow. Software and services stocks fell 0.7% after Accenture tumbled 18% on a reduced annual revenue outlook. The market continued to favor scarce computing hardware over slower-growing, labor-intensive tech services.
Micron Earnings in Focus
Micron Technology is set to report fiscal third-quarter results after the bell on Wednesday. The memory chip maker has guided for revenue of approximately $33.5 billion, plus or minus $750 million, with a gross margin of around 81%. CEO Sanjay Mehrotra has emphasized that “memory is a strategic asset,” pointing to rising demand for high-bandwidth memory (HBM) used in AI data centers. Micron, along with Samsung Electronics and SK Hynix, is a leading supplier of HBM. Capital spending for the current fiscal year is expected to exceed $25 billion.
Shares of Micron dropped 5% following last quarter’s report despite strong numbers, placing added weight on the forward outlook rather than past performance. Investors will be closely watching for guidance on HBM demand and overall pricing trends.
Key Economic Data on Tap
Thursday morning brings a critical macro release: the government will publish May personal income and outlays data, along with the latest Personal Consumption Expenditures (PCE) price index—the Federal Reserve’s preferred inflation gauge. The third estimate of first-quarter GDP will be released simultaneously. A higher-than-expected inflation reading could push bond yields higher and pressure tech valuations, which are sensitive to long-term profit expectations.
The Federal Reserve left its benchmark interest rate unchanged at 3.5% to 3.75% at its June meeting, warning that inflation remains elevated and that energy supply shocks could pose risks. The central bank’s cautious stance adds another layer of uncertainty for the chip rally, which has benefited from expectations of easier monetary policy earlier in the year.
Geopolitical Risks Resurface
Fresh concerns over shipping through the Strait of Hormuz emerged over the weekend. Iran’s state media reported that the waterway would remain closed until a ceasefire in Lebanon and oil waivers are granted, though U.S. officials denied the closure. Any disruption could spike oil prices, adding to inflation fears and potentially driving bond yields higher.
Tech funds in the U.S. attracted a record $21.46 billion in the week ended June 17, according to LSEG Lipper data, while total U.S. equity funds saw $38.37 billion in inflows. While such buying supports the market, it also means that crowded positions in chip stocks could amplify losses if sentiment turns negative.
The week ahead is packed with events: geopolitical tensions at Monday’s open, Micron’s earnings on Wednesday, and the PCE inflation data on Thursday. A strong guidance from Micron could reinforce the hardware rally, but a disappointing update might expose the growing divergence between surging chip stocks and lagging software names—a dynamic that some analysts see as a warning about the market’s narrow breadth.
