11:10am: Apple says price hikes ‘unavoidable’
Apple Inc (NASDAQ:AAPL, XETRA:APC) (Apple Inc (NASDAQ:AAPL, XETRA:APC), Apple Inc (NASDAQ:AAPL, XETRA:APC)) plans to raise prices on some of its products as surging memory and storage chip costs pressure its supply chain, CEO Tim Cook told The Wall Street Journal in an interview.
“Unfortunately, price increases are unavoidable,” Cook told the publication. “We’re doing our best to mitigate the huge increases that are being passed to us, and we’ve been trying to shield our customers from the increases, but the situation has become unsustainable.”
Cook did not specify which Apple products could become more expensive, when price changes might take effect, or how large any increases would be.
According to Cook, demand for memory used in artificial intelligence infrastructure has tightened supply and driven up component costs. Major technology companies, including Google, Microsoft, Meta Platforms and Amazon, have increased spending on AI data centers, boosting demand for specialized high-bandwidth memory and reducing availability for consumer electronics.
10am: Nasdaq leads rebound, but SpaceX falls again
Wall Street stocks have bounced back in opening trades, cutting some of their losses from yesterday.
The Nasdaq has opened up 0.9%, with the S&P 500 climbing 0.8%, while the Dow Jones has added 0.5%.
The strongest gains are in semiconductors and tech hardware, with Intel and Western Digital surging more than 11%, followed by Seagate, with ON Semiconductor, Micron, Monolithic Power Systems, KLA, Lam Research and Applied Materials all up between 5% and 10%, with investors buying the dip after the previous session’s sharp declines.
Not all technology names participated, with SpaceX remaining under pressure for the second day, down 7% to below $180, still well up from its $135 IPO price.
8.20am: Wall Street rebound expected
US stocks are set to rebound on Thursday after Wall Street suffered a sharp sell-off following the first meeting of a new Federal Reserve regime, with investors taking comfort from signs of a de-escalation in the Middle East.
Futures on the Nasdaq 100 have risen 1.3%, while the S&P 500 and Dow Jones were up 0.6% and 0.2% respectively.
The gains follow yesterday’s declines, when the Nasdaq fell 1.3% to 26,021, the S&P dropped 1.2% to 7,420 points, and the Dow slid % to 51,492.
This was a reaction to new Fed chair Kevin Warsh striking a notably hawkish tone, which fuelled expectations of further interest rate increases and led to a notable shift on bond markets.
Investors found some relief after President Donald Trump and his Iran counterpart digitally signed an interim ceasefire agreement, which has led to energy prices dropping to lows last seen in early March.
WTI crude fell over 2% to $75.15 a barrel, though concerns remain over energy supplies through the Strait of Hormuz.
Analysts said markets are now pricing a high probability of a Fed rate rise by October after Warsh repeatedly stressed the central bank’s commitment to price stability and signalled a move away from detailed forward guidance.
The DXY dollar index is up 0.55% to 100.74, hitting levels not seen for over a year.
Thursday has seen other central banks less hawkish, with the Swiss National Bank and Bank of England keeping rates unchanged as expected, both somewhat reassured by the implication of the Iran deal on inflationary pressures.
European markets were mixed, however, with the FTSE 100 down nearly 1% and other benchmarks flat, while Asian trading was similarly divided, with gains for Japan’s Nikkei and South Korea’s Kospi, but Chinese equities remained under pressure.
