Morning Bid: Micron puts chips back on the table

A look at the day ahead in European and global markets from Ankur Banerjee

High-stakes earnings from Micron more than delivered by outlining strong demand for its memory chips and that was enough to breathe life back into an AI-fuelled rally as investors shrugged off, for now, worries over valuations and demand.

Markets have cowered in recent days over worries that valuations for AI-related firms have become stretched following years of blistering gains with concerns also rising over whether the massive spending will take too long to pay off.

Micron, the only U.S.-based manufacturer of high bandwidth memory chips used alongside Nvidia's AI processors, helped ease some of those concerns as its earnings showed customers had committed $22 billion to lock in supplies of memory chips.

The firm also said it does not have a sense of when memory supply will catch up with increasing demand. Good news then also for Micron's South Korean rivals SK Hynix and Samsung Electronics.

They both surged to take the KOSPI up about 5%, as the world's best-performing stock market since the start of 2025 takes a wild ride on AI frenzy, fuelled by insatiable retail enthusiasm.

Not only has this AI rally turned the two South Korean chipmaking giants into stock market darlings and trillion-dollar firms, it has also thrust their employees into the top tier of the country's highly competitive marriage market.

Oil prices are back where they were before war broke out in the Middle East at the end of February. That could help ease some inflationary pressure. No one seems to have told bond traders though, who are still pricing in at least one rate hike from the Federal Reserve this year.

Those rate-hike bets have led the dollar to a more than one-year high against a basket of currencies, with the yen hovering near 40-year lows. It last fetched 161.73 per U.S. dollar and a break beyond 161.96 would be its lowest since 1986.

The spotlight will turn to U.S. inflation data, the Personal Consumption Expenditures price index, that could perhaps push the yen beyond those levels and to the brink of another round of intervention from Tokyo.

Key developments that could influence markets on Thursday:

Economic events: Germany GfK consumer sentiment for July, France consumer confidence for June

(By Ankur Banerjee in Singapore; Editing by Jacqueline Wong)