Semiconductor stocks rebound as Micron and Marvell lead sector gains

Micron and Marvell Technology shares led a second consecutive day of gains in the semiconductor sector on Tuesday, marking a significant recovery from the broad market sell-off that plagued investors earlier in the week. The advance in chip stocks helped stabilise the sector, which had suffered heavy losses on Friday due to rising concerns over inflation and the potential for the Federal Reserve to implement further interest rate hikes.

Micron, which recently surpassed a $1 trillion market capitalisation, saw its shares rise 4 per cent, extending the rebound from the previous session. The memory and storage maker has been a central figure in the artificial intelligence trade this year, contributing to broader market all-time highs alongside peers such as Samsung Electronics and SK Hynix, both of which also crossed the $1 trillion threshold last month and rallied on Tuesday.

Marvell Technology also posted gains, supported by specific corporate developments rather than sector-wide sentiment alone. The custom chipmaker’s shares increased following confirmation of its inclusion in the S&P 500 index, an effective change scheduled for June 22. This news had initially driven shares higher on Monday, with the momentum carrying through into Tuesday’s trading session.

The rally occurred against a backdrop of heightened economic uncertainty, with US stock futures previously climbing on optimism surrounding the artificial intelligence sector and anticipation of SpaceX’s initial public offering. However, the immediate focus for market participants has shifted to the upcoming release of the US Consumer Price Index report on Wednesday.

Investors are closely watching the CPI data for indications of how policymakers may adjust their stance at the Federal Reserve’s next meeting in June. While the report is not expected to provide definitive answers, it will offer critical clues regarding the trajectory of inflation and the likelihood of further monetary tightening, which continues to weigh on market valuations.

Other players in the memory and storage space also participated in the bounce, with SanDisk shares rising alongside Micron. Despite the positive momentum, the sustainability of the semiconductor sector’s recovery remains tied to broader macroeconomic factors, particularly how the Federal Reserve responds to inflationary pressures in the coming months.