Morning warp: Wall Street rebounds after strong Micron earnings 📈 Is AI euphoria back?

• Global markets breathed a sigh of relief following Micron's (MU.US) stronger-than-expected quarterly results and upbeat guidance, reinforcing the bullish narrative surrounding AI infrastructure and semiconductor demand. Nasdaq 100 futures climbed around 1.8%, while S&P 500 futures gained 0.5%. In Asia, South Korea outperformed, with the KOSPI rallying by as much as 7% at its intraday peak. European equity futures also point to a higher open, with Germany's DE40 advancing 0.4%.
• The key catalyst was Micron's earnings report. Shares of the memory-chip maker surged 15% in after-hours trading after the company projected revenue well above Wall Street expectations. Investors interpreted the results as evidence that demand for AI infrastructure remains resilient despite recent concerns over elevated technology valuations.
• Market sentiment also benefited from lower oil prices. Crude oil fell to around $72 per barrel, giving back much of the geopolitical risk premium linked to tensions surrounding Iran. The decline eased inflation concerns and supported broader risk appetite.
• Gold stabilized near $4,000 per ounce after briefly falling below that level earlier. The precious metal remained under pressure from a stronger U.S. dollar and expectations that interest rates could stay elevated for longer.
• Micron shares initially jumped around 9% in after-hours trading following the release of its fiscal third-quarter 2026 results, which comfortably exceeded market expectations, but finally surged more than 15%, which signals possible market cap of $1.35 - 1.4 trillion after the session open today. The company reported adjusted earnings per share (EPS) of $25.11, well above the consensus estimate of $20.49. Revenue reached $41.46 billion, significantly exceeding analysts' expectations of $35.69 billion.
• Micron also issued exceptionally strong guidance for the fourth quarter, forecasting adjusted EPS of $30–32 versus the market consensus of $25.31, while projecting revenue of $49–51 billion, compared with expectations of $43.24 billion.
• Gross margin expanded to 84.9%, outperforming both the company's previous guidance of 81.8% and the market consensus of 83.6%.
• The Cloud Memory segment generated $13.77 billion in revenue, well ahead of the expected $10.69 billion, while Core Data Center revenue reached $11.52 billion, far exceeding the consensus estimate of $6.88 billion. Management emphasized that customer demand remains exceptionally strong, supporting an optimistic outlook for the coming quarters. The company also declared a quarterly dividend of $0.15 per share.
• The Federal Reserve released the results of its annual stress tests, concluding that the largest U.S. banks remain well-capitalized and would be able to withstand a severe economic recession. Although hypothetical aggregate losses would exceed $700 billion, capital ratios would remain comfortably above regulatory minimums.
• The Fed also announced planned changes to its stress-testing methodology aimed at reducing volatility in capital requirements, with new post-stress capital buffers expected to be implemented following the 2027 testing cycle.
• Meta is expanding its partnership with Qualcomm and plans to deploy Qualcomm's C1000 processors in its data centers starting in 2028. Qualcomm stated that its data center processors will enter the market in mid-2028, while the company expects meaningful revenue from its custom silicon business beginning in late 2027. Microsoft is also expected to deploy Qualcomm's High Bandwidth Compute (HBC) chips across Azure data centers. Qualcomm shares rose more than 12% in after-hours trading.
• Anthropic accused Alibaba of gaining unauthorized access to its AI models through the Qwen research lab. Alibaba denied the allegations and declined to provide further comment.
• AI startup SambaNova secured fresh funding that reportedly lifted its valuation to $10 billion, according to The Information. 
• In China, investors are watching the government's planned issuance of up to €5 billion in sovereign bonds, alongside new measures from the People's Bank of China (PBOC) to expand its short-term liquidity management toolkit. Beijing continues refining its monetary policy transmission framework, although today's market rebound is primarily being driven by renewed confidence in the AI investment theme.

US100 Chart (H1)

Following Micron's earnings report, the US100 index moved above the 50-period EMA (orange line) and is now testing the 200-period EMA on the hourly chart. A sustained breakout from current levels would increase the probability of a move toward the all-time highs, which remain more than 700 points away.

Source: xStation5