Global stock markets stabilized on Wednesday following a brief sell-off in technology shares. Micron Technology reported earnings after the U.S. market close, with its third-quarter adjusted gross margin of 84.9% exceeding analyst expectations, sending its shares surging over 9% in after-hours trading. Concurrently, oil prices slid towards near four-month lows, while the U.S. dollar climbed to a one-year high.

The Dow Jones Industrial Average rose 182.06 points, or 0.35%, to close at 51,848.90. The Nasdaq Composite fell 110.40 points, or 0.43%, to 25,476.64, and the S&P 500 index declined 7.24 points, or 0.10%, to 7,358.22.

Technology stocks, which were heavily battered on Tuesday, edged higher ahead of earnings from chipmaker Micron Technology, whose products are a key component driving the AI boom. However, market sentiment remained fragile, prompting investors to seek safer haven assets like the U.S. dollar.

Major European stock indices closed mixed. The Stoxx Europe 600 rose 0.05%, while the Euro Stoxx 50 fell 0.27% and the Eurozone Blue Chip index declined 0.26%. France's CAC 40 gained 0.55%, Spain's IBEX 35 fell 0.44%, the UK's FTSE 100 rose 0.25%, and Germany's DAX dropped 0.71%.

Asian markets were volatile. South Korea's Kospi index surged 3.3%, helping to limit losses for major regional benchmarks after swinging between gains and losses. The index had plunged 10% in the previous session. Samsung Electronics jumped 9.8%, and SK Hynix rose 1.0%. Japan's Nikkei 225 closed down 0.9%, China's Shanghai Composite edged up 0.1%, and Hong Kong's Hang Seng Index gained 0.4%.

The Nasdaq 100 index had fallen more than 3% in the previous session due to concerns about excessive valuations.

Micron as an AI Bellwether

Recent market volatility has increased focus on Micron Technology, one of the biggest beneficiaries of surging demand driven by billions in AI infrastructure investment. Despite a 13% drop on Tuesday, the stock is still up over 250% for 2026.

Joachim Klement, Head of Strategy at Panmure Liberum, stated: "The main issue for Micron is not Micron itself, but the market's expectations for its third-quarter results. Even if Micron delivers a strong quarter and provides solid guidance, it may not be enough to meet the elevated expectations."

Mark Cranfield, a strategist for Bloomberg Markets Live, commented: "The main event for U.S. stocks this week is Micron's earnings report after the close on Wednesday. To drive a significant rebound in Nasdaq futures, Micron needs to provide an extremely optimistic outlook. The contract has been consistently blocked around 31,000, reminiscent of previous highs in October and January."

Disappointment Reflected in Share Prices

Evidence of massive capital inflows into AI infrastructure and its supply chain continues to emerge. South Korea's SK Hynix announced it is seeking to raise nearly $30 billion through a historic U.S. listing.

This offering would join a recent wave of AI-related financing through stock issuance. Previously, SpaceX conducted the largest initial public offering in history earlier this month, and Alphabet also plans an $85 billion financing round.

If Micron Technology and its chipmaking peers fail to meet extremely high expectations with their results and outlooks, concerns about their overextended rallies could trigger a new round of stock volatility.

Conversely, strong demand and pricing guidance would help alleviate fears that the AI trade is a bubble about to burst.

Guillermo Hernández Sampere, Head of Trading at MPPM, said: "Market expectations naturally rise for high-performing companies that reflect a sector's dynamics. Rationally, these expectations are difficult to meet, and disappointment is reflected in share price performance."

Dollar Hits New High for the Year

Despite relatively stable equity moves, the U.S. dollar continued to benefit from safe-haven demand as risk sentiment remained fragile.

The dollar rose 0.3% against a basket of major currencies, marking its third consecutive day of gains and on track for its longest winning streak in over a month. It consolidated at its highest level this year, supported by expectations the Federal Reserve may raise interest rates this year and the recent global tech stock sell-off.

Signals from the Fed's meeting last week that it could tighten policy before year-end prompted markets to price in rate hike expectations earlier.

LSEG market pricing indicates a 90% probability of a 25-basis-point Fed rate hike in September. Strong U.S. Purchasing Managers' Index data released on Tuesday further reinforced these bets.

The tech stock sell-off also benefited the dollar due to its safe-haven status.

Strategists at Scotiabank stated they believe the dollar should pull back, as market expectations for the Fed to hike at least once this year are overdone, especially with oil prices falling—the very expectation that has been driving the dollar higher.

They added: "The dollar also continues to benefit from a significant 'fear premium' due to lingering market concerns about geopolitics, particularly issues related to U.S.-Iran conflict."

Non-Dollar Currencies Suffer

On Wednesday, the euro was one of the main casualties of the stronger dollar.

Investors scaled back expectations for further significant European Central Bank rate hikes this year while increasing the probability priced in for the Fed to raise borrowing costs.

The euro traded near a one-year low, falling for a third consecutive day to $1.1354. The currency has fallen over 2.5% so far in June, on track for its worst monthly performance since July of last year.

The yen also weakened on the day, trading around 161.695, keeping markets alert to potential currency intervention to support the weak Japanese currency.

Minutes from the Bank of Japan's latest meeting, where it raised rates to a 31-year high of 1.00%, showed policymakers discussed rising inflation risks, with some members calling for faster rate hikes to bring borrowing costs closer to levels considered neutral for the economy.

Bitcoin fell below $60,000.

Bitcoin hit an intraday low of $59,283.53, its lowest level since June 5th, and was last down 4.45% at $59,612.54.

Bond Markets Remain Volatile

U.S. Treasury yields were choppy. The yield on the two-year Treasury note rose 0.7 basis points to 4.206%, while the benchmark 10-year yield fell 1 basis point to 4.48% as investors continued to price in the possibility of a Fed rate hike this year.

Meanwhile, falling oil prices limited yield gains. Investors will focus on a U.S. Treasury auction of $70 billion in five-year notes, with the U.S. economic data calendar light.

Eurozone government bond yields edged lower, supported by falling oil prices, as markets awaited Germany's Ifo business climate indicator.

This data follows Tuesday's weak preliminary German June PMI figures. However, market moves were limited as inflation concerns persist and further ECB rate hikes remain possible.

Italy and Germany have bond supply scheduled for Wednesday. The yield on the 10-year German Bund fell 0.6 basis points to 2.906%.

Oil Prices Continue to Slide

Meanwhile, oil prices extended their decline as more tankers publicly transited the Strait of Hormuz. International oil prices fell significantly on the 24th. At the close, the price of light sweet crude for August delivery on the New York Mercantile Exchange fell $2.87 to settle at $70.34 per barrel, a drop of 3.92%. London Brent crude for August delivery fell $3.34 to settle at $73.74 per barrel, a decline of 4.33%.

Ships are turning on satellite signals while passing through the waterway, indicating increased confidence among vessel owners.

The drop in crude prices pushed U.S. diesel prices below $5 per gallon for the first time since mid-March.

As inflation concerns eased, U.S. Treasuries gained slightly, with the 10-year yield falling 2 basis points to 4.48%.

Significant uncertainty remains regarding the outlook, as the U.S. and Iran have given conflicting accounts of what was agreed in a peace deal, including key elements like verification and control of the Strait of Hormuz.

Analysts at MUFG said: "Although negotiations remain complex and the future governance of the Strait of Hormuz is in question, markets are increasingly pricing in a gradual normalization of Middle East energy flows."

U.S. sanctions waivers on Iranian oil sales also supported market sentiment, reinforcing expectations that regional crude supply will increase significantly.

Gold Tests Key Support

Spot gold fell below $3,960 per ounce, down 3.66% on the day, as a stronger dollar made dollar-priced gold more expensive for buyers.

Analysts at Saxo Bank stated: "Support from rising U.S. Treasuries is limited, as falling energy prices have eased inflation concerns."

They added: "An unusually strong positive correlation between gold and the S&P 500 is still weighing on the gold price, pushing it into the key $4,000 to $4,100 support zone."

Despite being seen as a safe-haven investment, gold often declines during major cross-market sell-offs as it serves as a source of liquidity. The tech stock plunge put further pressure on gold, which was already under pressure from inflation concerns—inflation risks imply the Fed will raise interest rates.

It is worth noting that several major international banks have recently lowered their gold price forecasts.

Goldman Sachs expects the U.S. core PCE to return to the 2% era around 2027.

Goldman's inflation forecast chart shows that although U.S. core inflation in 2026 will still be supported by energy price pass-through, rising AI-related product costs, and demand pressure from stock market prosperity, the overall inflation trend will gradually decline.

Goldman expects the U.S. core PCE inflation rate to remain around 3% briefly in 2026 before declining steadily, approaching 2% by 2027. Goldman judges that the U.S. inflation's "last mile" decline will be slow, but both PCE and CPI will eventually move closer to the Fed's 2% target.

Looking past the noise of the tech stock plunge, Barclays and Stifel see strong earnings and a year-end S&P 500 target of 7,800.

Amid the recent sustained selling pressure in U.S. stocks, two Wall Street firms, Barclays and Stifel, released reports on the same day, both raising their year-end 2026 target for the S&P 500 index to 7,800 points based on a robust corporate earnings outlook.

Barclays analyst Venu Krishna and his team noted in the report: "The bull case for equities remains intact, but as Fed policy support fades, visibility on earnings and AI capital expenditure needs to play a larger role."

Barclays raised its 2026 S&P 500 earnings per share forecast from $321 to $337 and provided its first 2027 index target prediction of 8,800 points.

However, the path higher will not be smooth. Barclays cautioned in the report that rising inflation concerns and a strong labor market have sparked worries about Fed rate hikes, which could erode equity performance.

Stifel equity market strategist Thomas Carroll also views strong earnings as the primary catalyst for continued stock market gains. However, he also observes signs of a persistent rotation away from mega-cap stocks.

Notable Individual Stock Moves

Semiconductor company Cerebras, reporting its first earnings since its May IPO, saw its shares plunge 19% following the results. The company reported first-quarter revenue of $1.934 billion and a loss per share of $0.22. The company also warned that its core gross margin would decline from 46.5% in Q1, expecting it to narrow to a range of 36% to 38% in the second quarter.

FedEx reported better-than-expected fourth-quarter results, with its shares closing largely flat. This report is also the last quarterly earnings before FedEx spins off its freight business.

Micron Technology closed down 0.37%. After the U.S. market close, Micron Technology reported earnings. Third-quarter adjusted revenue was $41.46 billion versus analyst expectations of $35.69 billion. Core data center revenue was $11.52 billion versus expectations of $6.8 billion. Cloud storage revenue was $13.77 billion versus expectations of $10.69 billion. Mobile and client revenue was $11.52 billion versus expectations of $9.73 billion. Adjusted EPS was $25.11 versus expectations of $20.49. Adjusted operating profit was $33.68 billion versus expectations of $27.86 billion. Adjusted gross margin was 84.9% versus expectations of 81.9%. The company forecast fourth-quarter adjusted revenue of $49.0-$51.0 billion versus expectations of $43.24 billion, and adjusted EPS of $30-$32 versus expectations of $25.31.

Micron Technology shares surged over 9% in after-hours trading.

The rebound was not limited to Micron Technology: memory stocks, which were collectively sold off on Tuesday dragged down by a plunge in South Korean tech shares, saw their shares recover. SanDisk fell over 2%, Western Digital fell 3.93%, and Seagate Technology fell 4.28%.

KB Home reported second-quarter revenue of $1.11 billion, above the Refinitiv consensus analyst estimate of $1.10 billion, sending its shares up 16.65%; however, its EPS of $0.43 missed the market expectation of $0.45.

Worthington Enterprises reported fourth-quarter results that missed expectations, with its shares falling 6%. The company reported adjusted EPS of $0.97 and total revenue of $371.5 million; analysts surveyed by FactSet had expected EPS of $1.06 and revenue of $386.5 million.

According to Swaggy Stocks data, Wendy's became one of the most discussed stocks on the Reddit investment community "WallStreetBets," leading to a sharp price surge, with the stock closing up 25%. S3 Partners data shows Wendy's has a short interest of about 23% of its float, creating the potential for a short squeeze.

Arm shares closed down 1.99% despite receiving target price increases from both UBS and TD Cowen. Both institutions stated that with the rapid adoption of agentic AI and an industry-wide shift in computing architecture, the company's CPU business prospects have significantly improved.

Take-Two Interactive announced that "Grand Theft Auto VI" will begin pre-orders this Thursday, pushing its shares down 2.85%; BTIG initiated coverage on the stock with a "Buy" rating, believing the blockbuster title will drive steady multi-year profit growth for the company, further boosting the stock price.