Technology shares held their ground as the wider market retreated. Micron’s results now give the AI trade fresh momentum, but 5.3% Treasury yields remain difficult to ignore.

💻 Nasdaq carries the market into Q4

• The Nasdaq Composite rose 0.24% Wednesday to 26,861.06, becoming the only major US index to finish higher.
• The S&P 500 lost 0.25%, the Dow dropped 0.86% and the Russell 2000 declined 0.4%. Hardly a dramatic Nasdaq rally, but meaningful leadership in a broadly weaker session.
• Technology was the only clear sector winner, gaining 0.6% as Microsoft, Apple and Nvidia advanced. Nine of the S&P 500’s 11 sectors finished lower, while declining stocks outnumbered advancers on both major exchanges.
• The Nasdaq gained 1.9% in September, while the S&P 500 lost 0.45% and the Dow dropped 4.3%. Both the Nasdaq and the S&P recorded a second consecutive quarterly advance, whereas the Dow declined for the second time in three quarters. Technology enters Q4 with the strongest momentum.
• Softer inflation initially sent the Nasdaq up as much as 1.2%, but rising yields reduced the gain. Headline PCE inflation increased 3.4% annually, below the 3.7% expected, while core inflation came in around 3%. October rate-increase expectations fell to 37%, from 51% one session earlier.

🧠 Micron validates AI demand after the bell

• Micron delivered the session’s most important corporate update. Fourth-quarter revenue more than quadrupled to $54.23 billion, beating the $51.07 billion consensus, while adjusted earnings reached $33.42 per share. The company guided for first-quarter revenue of $61.5 billion, versus $57.02 billion expected.
• Contracted demand also strengthened. Customer commitments under long-term supply agreements rose from $22 billion in June to $32 billion, while remaining performance obligations climbed from $100 billion to $150 billion.
• Yet Micron shares gained less than 1% after hours. After all, the stock had already more than tripled this year. The AI trade is still producing extraordinary growth, although extraordinary has increasingly become the minimum requirement.
• Elsewhere, Hewlett Packard Enterprise rose 3.9% after lifting its long-term networking-growth forecast and announcing a $1.2 billion deal with Vultr. Moderna dropped 5.3% following a Citi downgrade, while Liquidia collapsed more than 50% after losing a patent dispute.

🌍 Global markets start the quarter divided

• US futures opened the new quarter positively, with Nasdaq and S&P 500 contracts gaining around 0.3%. Europe was less enthusiastic, with regional futures falling 0.75%.
• Japan’s Nikkei gained more than 1% as semiconductor shares followed Micron higher. However, the broader Asia-Pacific index excluding Japan slipped 0.2% and South Korea’s Kospi edged lower, showing that a strong AI catalyst was not sufficient to lift every market.
• South Korea nevertheless delivered compelling evidence of the AI boom’s economic impact. Exports jumped 83.5% year over year to a record $120.9 billion, while semiconductor shipments surged 262.8% to $60.3 billion. The country recorded a record trade surplus of $49.85 billion.

🫂 It’s the bonds we make along the way

• The 10-year Treasury yield remains near 5.29% and the 30-year yield above 5.6%, limiting enthusiasm for highly valued shares. Stronger-than-expected private hiring and an upward revision to second-quarter growth reinforced the view that the economy can withstand — and may require — higher rates for longer.
• Oil remains another source of pressure. West Texas Intermediate is trading around $90.50 and Brent near $98 as stalled US-Iran negotiations preserve the risk of supply disruption.
• Gold is holding around $4,190 after losing 6.6% in September. Bitcoin trades near $83,400 after briefly reaching $85,500, while the dollar index is close to 101.5. EUR/USD remains near $1.1330 and USD/JPY has moved back toward ¥157.70.