U.S. markets face pressure as tech losses, Fed inflation focus shape Friday trading

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U.S. markets face tech, Fed pressure

Highlights

Apple falls over 6% and Microsoft drops 3.5% after announcing price increases driven by rising AI-demanded memory costs, weighing on the Nasdaq Composite.
Core personal consumption expenditures price index rises 3.4% year-over-year in May, its highest level since late 2023, keeping Fed officials focused on inflation risks.
Bain & Co. and Altagamma forecast luxury experience spending to grow 3%–7% and luxury goods sales to rise 1%–4% in 2024, ending a two-year decline in luxury goods.

Tech pricing and policy signals set the tone

As reported by CNBC, Micron’s strong earnings-driven rally is not enough to lift the broader technology sector, with the Nasdaq Composite extending its longest losing streak since February. Apple falls more than 6% after announcing price increases for iPad and MacBook products, while Microsoft loses 3.5% after saying it is raising prices for Xbox game consoles.

Both companies point to rising memory costs as a factor behind the increases, highlighting how AI-related demand for memory chips is feeding through to consumer electronics prices. Micron rises more than 15% after its earnings report, but the chipmaker and other semiconductor stocks trade lower Friday morning following a report that OpenAI is considering delaying its IPO.

Federal Reserve officials are also keeping inflation at the center of the market conversation. Chicago Fed President Austan Goolsbee says the bigger challenge is on the inflation side of the central bank’s mandate, while New York Fed President John Williams says he expects inflation to begin trending lower. Data released Thursday shows the core personal consumption expenditures price index rises 3.4% in May from a year earlier, its highest reading since late 2023.

Court rulings, bank promotions and luxury demand add to focus

The Supreme Court rules that Bayer cannot be sued over state-level claims that it failed to warn consumers about cancer risks tied to its products, handing the Roundup maker a significant legal win. In a separate decision, the court also allows President Donald Trump to end humanitarian protections that shield hundreds of thousands of Haitian and Syrian immigrants from deportation.

JPMorgan Chase also updates its leadership structure, saying in a regulatory filing that it promotes Doug Petno and Troy Rohrbaugh to newly created roles as co-presidents. The move marks another step in CEO Jamie Dimon’s succession planning, with Petno becoming sole head of investment banking and Rohrbaugh taking charge of the consumer and community banking division.

In luxury markets, spending is expected to return to growth this year as consumers prioritize travel and family experiences. Bain & Co. and Altagamma project luxury experience spending will grow 3% to 7%, while luxury goods sales are expected to rise 1% to 4%, ending two years of declines for high-end goods.

Our earlier coverage of the global retreat from technology stocks described how investors pulled back from AI-linked names as rising infrastructure and memory costs began to pressure the sector. We noted that Apple’s device price increases and concerns tied to SoftBank’s exposure to a potential OpenAI IPO delay helped deepen the selloff, hitting Asian markets particularly hard.

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