Nasdaq Index: Apple Weighs, Micron Shines as PCE Supports Stock Market

Dow Hits Record While Nasdaq Can’t Get Out of Its Own Way

The Dow Jones Industrial Average climbed 768 points or 1.48% to a new record high about an hour after Thursday’s opening. The S&P 500 is up 0.48%. The Nasdaq Composite is down 0.18%. That split tells you everything about where the money is going and where it is not.

Micron ripped 15% higher on earnings that crushed every estimate and Apple dragged the rest of the Nasdaq lower after announcing price hikes tied to rising chip costs. The Dow doesn’t hit records on days when money is leaving equities. It hits records when money is rotating.

Daily S&P 500 Index (SPX) Technical Analysis

The S&P 500 Index is edging higher Thursday after recovering from early session weakness to 7323.50. This put it temporarily below the 50-day moving average at 7357.70, the key indicator that is holding the uptrend together in my opinion.

The challenge for buyers remains the short-term retracement zone at 7429.38 to 7474.57. A sustained move under the 50% level at 7429.38 will indicate a cautious trade and the presence of some sellers. Overtaking the 61.8% level at 7474.57 will be a sign of strength and signal the presence of buyers.

Essentially, a sustained move over 7474.57 could lead to a test of the secondary lower top at 7577.92. This is the last potential resistance before the all-time high at 7629.90.

If buyers can overcome 7429.38 to 7474.57 then the 50-day MA at 7357.33 comes back into play. If this fails, we could begin to see some strong selling pressure, eventually leading to the swing bottom at 7237.85. In my opinion, this is the trigger point for an acceleration to the downside.

Daily Nasdaq Composite (IXIC) Technical Analysis

The Nasdaq Composite is under pressure too after early buyers were rejected at the 50-day moving average at 25754.29. This is the key resistance and pivot level.

Overtaking the 50-day MA will put the IXIC in a position to challenge a short-term retracement zone at 26085.30 to 26346.05. This is the area that separates a possible resumption of the bull market from the start of a sharp break.

If the early sell-off resumes and we see a new low later in the session then look for the selling to possibly extend into the main swing bottom at 24980.38. This is the last support before the long-term retracement zone at 23940.25 to 23173.24 along with the 200-day moving average at 23608.61.

Micron Blew Past Every Estimate and Guided Higher

Micron surged more than 15% in the first hour Thursday and briefly pushed its market cap past $1.4 trillion before settling around $1.3 trillion. Adjusted earnings came in at $25.11 per share against expectations of $20.78. Revenue more than quadrupled to $41.46 billion from $9.3 billion a year ago, blowing past the $35.85 billion consensus. Management guided the current quarter to roughly $50 billion.

Micron locked in $22 billion in customer commitments and the supply side still cannot keep up with demand. That is not a company worried about AI spending getting ahead of itself. The memory chip shortage tied to artificial intelligence workloads is real and Micron is sitting at the center of it.

Apple Raised Prices and the Market Took It Out on the Whole Sector

Apple dropped nearly 5% in the first hour after announcing higher prices on MacBook laptops and iPad tablets, pointing to rising chip costs. Apple is the largest buyer of semiconductors in the world and if its component costs are climbing, margins are under pressure. Alphabet fell more than 1%. Meta dropped more than 1%. Nvidia and Amazon each lost more than 2%. Microsoft moved lower. Every major tech name that buys chips in volume got hit with the same margin question and that is why the Nasdaq is red on a day Micron gained 15%.

PCE Came In Cool Enough to Keep the Bears Quiet

The May PCE report landed Thursday morning and the headline number rose 0.4% month over month against expectations of 0.5%. Year over year headline inflation came in at 4.1%, matching consensus. Core PCE rose 0.3% monthly and 3.4% annually, both in line. The 3.4% core reading is the highest since October 2023 but the market had been bracing for worse with energy prices elevated from the Middle East conflict.

The 10-year Treasury yield dropped more than 2 basis points to about 4.374% on the print. An in-line PCE on a morning where the Dow is hitting records and the S&P is holding its 50-day moving average is enough to keep the bid under equities. The inflation picture is not accelerating and for now that is all the bulls need.

Stocks in the News

Johnson & Johnson, JPMorgan Chase and Caterpillar led the Dow to its record. Healthcare, financials and industrials carrying an index to a new all-time high on the same morning the Nasdaq is down is the clearest picture of this rotation.

Qualcomm gained about 3% after raising its long-term sales forecast for products outside of smartphones. Western Digital, KLA and Applied Materials all traded higher on the Micron earnings wave.

What to Watch

The Dow just hit a record and the Nasdaq got rejected at the 50-day moving average on the same morning. Micron proved AI demand is accelerating but Apple showed that the cost side of the semiconductor equation cuts both ways. PCE came in clean enough that the Fed does not have new ammunition to escalate the rate hike conversation. If inflation stays in this range, the hawkish projections from last week’s meeting start to look like the ceiling rather than the floor.

The S&P 500 recovered from early weakness below the 50-day and is holding above it. The Nasdaq is stuck below its 50-day at 25754.29 and until it reclaims that level, rallies are going to get sold. A Dow hitting records with the Nasdaq under its 50-day is not bearish. It is selective. The money is still in the market. It is just choosing where to go.

More Information in our Economic Calendar.