(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

June 25 (Reuters) -

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

Micron Technology's impressive earnings update and demand

forecasts on Wednesday have reheated the shaky chip sector,

lifting the trillion-dollar memory chip maker's stock about 14%

overnight and igniting a tech rally around the world on

Thursday.

With Qualcomm also revealing the extent of demand for its chips

over the next couple of years, any suggestion that this week's

market wobble was down to an easing of the chip frenzy appears

wide of the mark.

I'll get into that and more below.

But first, check out my latest column on why peace in the Gulf

is unlikely to help the Federal Reserve's inflation dilemma -

and could even exacerbate it.

And listen to the latest episode of the Morning Bid daily

podcast. Subscribe to hear Reuters journalists discuss the

biggest news in markets and finance seven days a week.

MICRONECONOMICS

With Wall Street futures back higher after the main indexes

ended in the red for a second day on Wednesday, the readout for

other chip-heavy global indexes from the Micron news was

immediate. South Korea's KOSPI, whose most valuable firm SK

Hynix filed for a U.S. stock offering of some $29 billion on

Wednesday, jumped more than 5% on Thursday.

The other big milestone of the day was the return of global

crude oil prices to levels seen just before the Iran war started

in late February, with Brent crude now trading at under $73 per

barrel. Energy prices' completion of this dramatic four-month

round trip came amid more reports of rising shipping traffic in

the Strait of Hormuz since the announcement of the U.S.-Iran

interim agreement.

While that, and some poor U.S. housing data, weighed on

long-dated Treasury yields, it did little to defuse Federal

Reserve rate-hike expectations. Two-year Treasury yields did

slip but remain some 75 basis points higher than they were just

before the Iran war.

That's partly because core U.S. inflation was a problem even

before the war started. We'll get an update on that later today

with the release of the May U.S. PCE report. It's expected to

show that core annual inflation ticked higher to 3.4% last

month.

The Fed's wariness is also partly connected to expectations

that the AI spending surge, soaring stocks and rising chip

prices could be amplifying inflation more broadly, an issue that

could - perhaps ironically - be worsened if the fuel price

retreat takes the brakes off economic activity and spending

elsewhere in the economy.

Chart of the day

Micron forecast quarterly profit and revenue well above

expectations and said its customers had committed $22 billion to

lock in supplies of memory chips, sending its shares surging in

after-hours trading.

Micron's stock, which now values the company at up to $1.3

trillion, has nearly quadrupled this year, and most of that rise

has happened since April even as the Iran war and energy shock

was unfolding.

Today's events to watch

* U.S. May PCE inflation data (8:30 a.m. EDT), May durable

goods (8:30 a.m. EDT), weekly jobless claims (8:30 a.m. EDT)

* U.S. 7-year note auction (1 p.m. EDT)

* Fed's Michelle Bowman, New York Fed's John Williams and

Chicago Fed's Austan Goolsbee all speak

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Opinions expressed are those of the author. They do not reflect

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