Markets saw a setback this week led by a sharp sell-off in global chip stocks with the Korean Kospi index dropping more than 7% and the Philadelphia semiconductor index, known as the SOX index, falling more than 6% before recovering slightly.
The sell-off created a big divergence in the performance of major US indices with the technology-led Nasdaq Composite falling 4%, while the smaller company-focused Russell 2000 gained almost 1% and the Dow Jones Industrials index also finished in positive territory.
On the macroeconomic front, headline PCE (Personal Consumption Expenditures) inflation rose above 4% for the first time in three years, driven by higher energy prices.
Core PCE, which excludes volatile energy and food prices increased a lower-than-expected 0.3% month-on-month and ticked up to 3.4% on an annual basis.
This partially alleviated fears of rising interest rates which saw 10-year bond yields fall around 0.2% over the week to 4.3%.
Falling oil prices gave airlines a lift with United Airlines and Delta Air Lines scaling record highs while American Airlines shares hit a new six month high.
At the other end of the performance spectrum was Oracle and Palantir Technologies which got caught up in the cross hairs of the broad technology sell-off.
Micron knocks it out the park
The memory chip maker cleared what looked like a daunting earnings bar while raising revenue and profit forecasts beyond analysts’ expectations. The shares gained 16%, adding nearly $200 billion to Micron’s market value, taking 2026 share price gains to 325%.
Third quarter revenues jumped 74% on the prior quarter to $41.46 billion representing more than a four-fold increase against the prior year, while earnings per share came in at $24.67 versus $20.7 expected.
Micron projected fiscal fourth quarter revenues of $50 billion and adjusted earnings per share of $31 in the middle of the range, blowing away consensus forecasts of $43 billion and $25.3.
Allaying fears that demand may have peaked, Micron said it expected the memory chip shortage to persist beyond 2027 and disclosed $100 billion of contracts extending through 2030.
Analysts at Bloomberg suggested this represents a structural change away from short-term contracts typical of the industry of old, towards longer-term deals as hyperscalers seek to lock in supply.
New look for FedEx
Investors got the first look at a slimmed down FedEx after the logistics giant spun off its trucking business on 1 June. Fourth quarter revenue and profit topped analysts’ estimates, helped by strong domestic demand.
The company projected fiscal 2027 revenue growth of 11% and adjusted earnings per share in a range of $16.9 to $18.1 and announced its was moving its 31 May year end to the end of December, starting immediately.
This created some confusion as analysts have yet to build their models to reflect the separation of the freight business, although management highlighted that the June to December transitional period implies roughly 20% year-on-year earnings growth.
CEO Rajesh Subramaniam said the company is benefiting from operating in higher yielding parts of the market while also delivering on more than £1 billion of cost savings.
Free cash flow generation is becoming a key part of the narrative post the freight business spin-off and the company announced a $1 billion share buyback over the rest of 2026, on top of the 5% increase in the dividend previously announced.
The shares fell around 3% but remain up around 36% year-to-date compared with a 7% gain in the S&P 500.
Carnival benefits from robust demand
Carnival was stuck in the doldrums this week with the shares drifting lower as the cruise operator projected third quarter earnings below expectations, taking the shine off another record quarter amid strong customer bookings.
Second quarter revenues climbed 5.3% year-on-year to $6.7 billion which fell slightly shy of analysts’ estimates while earnings per share came in significantly ahead of forecasts at $0.41.
The company said demand remains exceptionally robust with customer deposits reaching an all-time high of $9 billion with 93% of 2026 capacity already booked at historically high prices, while demand for 2027 and beyond is exceeding prior year levels.
Despite the drag from fuel costs which were up by a third, good cost discipline and sharper commercial focus allowed Carnival to exceed pre-war guidance and deliver a 12th consecutive quarter of record net yields.
Net yield is a key performance metric for cruise companies which measures net daily revenue per available passenger space. The shares are up around 15% over the last year, compared with a 21% gain in the S&P 500 index.
Martin Gamble: Shares and Markets Writer
Martin Gamble is Shares and Markets writer at AJ Bell. He was previously the Education Editor of Shares Magazine. He has been with the business since 2019.
Martin graduated from the University of Kent in...
