Micron's AI-fueled earnings beat steadies markets after tech rout; oil slides on Hormuz easing
Global stock markets found their footing after a sharp tech sell-off, as Micron Technology's stronger-than-expected quarterly results and bullish AI demand outlook reassured investors. Oil prices extended declines to multi-month lows amid progress in the Strait of Hormuz.
Tech rout and recovery
Equity markets stabilised on Wednesday after a brutal sell-off in technology shares earlier in the week. South Korea's Kospi index, which had plunged nearly 10% on Tuesday, rebounded 3% on Wednesday, led by Samsung and SK Hynix. The sell-off, which also sent Micron's stock down more than 13% in the previous session, had no single trigger but reflected growing unease about stretched valuations in the AI sector.
The sharp falls in tech stocks, which occurred without any significant trigger, are further evidence of the growing volatility of these stocks, a consequence of what increasingly appear to be inflated earnings expectations and/or valuations.
Micron delivers
After the US market close on Wednesday, Micron Technology reported fiscal third-quarter revenue of $9.42 billion, up from $6.81 billion in the prior quarter and well above the analyst range of $8.80 billion to $9.20 billion. The company forecast fourth-quarter revenue of about $10.5 billion, handily beating the $9.9 billion consensus. CEO Sanjay Mehrotra said demand for advanced HBM memory used in AI data centres remains overwhelming, with the entire production capacity for 2026 and early 2027 already sold out. The stock surged in after-hours trading.
- Previous quarter
- 6.81 $B
- Q3 2026
- 9.42 $B
- Q4 2026 guidance
- 10.5 $B
Oil and macro relief
Oil prices fell further, with Brent crude dipping below $75 a barrel and US WTI sliding under $70, both at their lowest since March. The decline was fuelled by the gradual return of maritime traffic through the Strait of Hormuz and US assurances on freedom of navigation, easing fears of a supply disruption that had lingered since the start of the Middle East conflict. Cheaper energy helped dampen inflation worries, pushing the yield on the 10-year US Treasury down to 4.41% and reinforcing bets that the Federal Reserve can avoid further rate hikes.
Regional market snapshot
European bourses ended lower for a third straight day, with the Stoxx 600 off 0.25%. Frankfurt lost 0.84%, Milan 0.56% and London 0.2%, while Paris was nearly flat. The euro weakened to $1.1353, a one-year low. In Asia on Thursday, Tokyo's Nikkei opened 1.28% higher at 70,061.09, adding 886 points, as the Micron results lifted technology shares. The yen held steady at 161.75 per dollar. Investors now turn to the US core PCE inflation data due later on Thursday, with estimates pointing to a slight acceleration.
- Tech sell-off: Kospi drops nearly 10%, Micron stock falls over 13%.
- Asian markets mixed; Kospi recovers 3%. European bourses decline. Micron reports after close.
- Tokyo Nikkei opens up 1.28% at 70,061.09 on Micron's strong results.
Looking ahead
The Micron report was seen as one of the most important tests of the year for the tech sector, and its strong guidance has temporarily eased fears of an AI bubble. However, analysts caution that volatility may persist as markets reassess the sustainability of AI-driven earnings growth. The upcoming inflation reading will be the next key catalyst for global rate expectations.
