Micron Surges Into $1 Trillion Club As Nasdaq Hits Record

Summary

Micron surged into the $1 trillion market capitalisation club after UBS sharply raised its price target, helping lift the Nasdaq and S&P 500 to fresh record highs. The FTSE 100 posted modest gains as banking and mining shares advanced, although BP fell after removing chairman Albert Manifold. The US dollar held firm against major currencies while the yen stayed close to intervention levels ahead of next month’s Bank of Japan meeting. Gold prices edged lower and Brent crude remained near $100 per barrel as traders monitored developments in US-Iran ceasefire talks.

Equities

The FTSE 100 closed 0.2% higher on Tuesday at 10,491.39, reaching a five-week high as investors responded to signs of progress in talks between the US and Iran. The FTSE 250 added 0.7% and touched its highest level since early March, extending its fourth consecutive session of gains despite renewed military action in the region and continuing concerns over shipping through the Strait of Hormuz.

Banking and mining stocks provided much of the support for London markets on Tuesday. HSBC, Barclays and Lloyds all closed higher, while Rio Tinto gained 2% and Glencore rose 3% as firmer metals prices lifted sentiment across the sector. Brent crude climbed around 4% following US strikes in Iran, keeping energy markets under close watch.

BP closed 4% lower on Tuesday after the oil major removed chairman Albert Manifold with immediate effect. The company cited governance standards, oversight and conduct issues only months after his appointment to oversee a broader strategic overhaul. Kingfisher rose nearly 4% after the home improvement retailer maintained its full-year profit outlook despite weaker first-quarter underlying sales.

Melrose Industries ended Tuesday 5.3% lower after an overheating chemical tank at its GKN Garden Grove facility in California triggered emergency response measures and evacuation orders over the weekend. Investors also continued to assess UK inflation pressures after new data showed British shop price inflation accelerated in May due to disruption and higher energy costs linked to the conflict in the Middle East.

In the US, the S&P 500 closed 0.61% higher at a record 7,519.12, while the Nasdaq Composite gained 1.19% to another all-time closing high. The Dow Jones Industrial Average fell 0.23% as weakness in consumer stocks limited broader gains. The Russell 2000 also touched an intraday record during Tuesday’s session.

Micron jumped 19% on Tuesday and entered the $1 trillion market capitalisation club for the first time after UBS raised its price target on the chipmaker to $1,625 from $535. The Philadelphia Semiconductor Index climbed 5.5% to a record high as investors continued to back artificial intelligence-related technology shares.

Qualcomm closed almost 4.5% higher after reports that it had secured a chip supply agreement with TikTok owner ByteDance. Marvell Technology added 6%, while strong earnings growth expectations continued to support sentiment across the US technology sector.

Forex & Commodities

The US dollar held firm early on Wednesday as traders assessed renewed tensions between Washington and Tehran after fresh US strikes near the Strait of Hormuz complicated ceasefire discussions. The dollar index traded at 99.08 in Asian trading, while the euro edged slightly higher to $1.164 and sterling held close to $1.349 against the US currency.

The Japanese yen traded at 159.3 per dollar on Wednesday morning, remaining close to levels that previously triggered intervention by Japanese authorities earlier this month. Bank of Japan Governor Kazuo Ueda warned that higher oil prices linked to the conflict could become more persistent due to rising wages and elevated inflation expectations. Markets are now pricing in strong odds of a Bank of Japan rate rise at its June meeting, with Tokyo inflation data due later this week expected to influence expectations for further tightening.

The New Zealand dollar climbed to $0.5876 after the Reserve Bank of New Zealand kept interest rates unchanged in a closely divided decision. Three policymakers voted for a quarter-point increase, while Governor Anna Breman used her deciding vote to leave rates on hold. The central bank also warned that interest rates would likely need to rise sooner and by more than previously expected.

The Australian dollar reversed earlier gains and moved lower against the US dollar after inflation data came in softer than forecast, reducing pressure for additional policy tightening from the Reserve Bank of Australia.

Gold prices edged lower on Wednesday morning as investors assessed developments in the Middle East and looked ahead to comments from Federal Reserve officials. Spot gold slipped to $4,493 per ounce, while silver fell to $75.58 per ounce. Platinum traded at $1,929 and palladium eased to $1,368.

Oil prices pulled back early on Wednesday after surging during the previous session. Brent crude fell to $98.16 per barrel, while US West Texas Intermediate crude dropped to $92.23 as traders monitored whether negotiations to reopen the Strait of Hormuz could resume despite renewed military action in the region.