June 10th Pre-Market

Good Morning

Inflation hit 4.2% this morning and everyone's going to panic about it. I wouldn't. Take out gas and energy and prices hardly budged, energy did 60% of the damage on its own. This is an oil problem wearing an inflation costume. The market shrugged at the number, the real red today is related to war flaring up again.

Let's dig in...

Today's Big Picture

1. CPI Hits 4.2 Percent, But The Core Stayed Tame 
May's inflation report came in at 4.2 percent, the hottest since 2023 and right where economists expected. Here's the part getting missed: take out gas and energy, and prices barely moved. Energy alone drove 60 percent of the increase. The scary number is almost all oil, and the Fed still holds rates next week, so the real question is whether oil keeps it high into the fall.

2. Oil Climbs As US And Iran Trade Strikes 
The US and Iran exchanged strikes overnight near the Strait of Hormuz, and Trump said Iran will pay for stalling. Crude pushed back toward 90 and the April truce is cracking. Energy is the one input still driving the CPI headline. So the Fed's next move now hangs on a conflict, not on the economy.

3. Chips Sell Off Again Ahead Of SpaceX 
Semis are down a, with Micron, AMD and Broadcom all leaking premarket. Some of it is retail raising cash for Friday's SpaceX listing, the rest is profit-taking after a monster run. The tell is the money moving the other way, into Home Depot, Smucker and the transports. Rotation, not a breakdown.

Market Overview

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Stock Spotlight (pre-market)

Super Micro $SMCI ( ▼ 7.62% )  

Down premarket after announcing a 7 billion dollar equity raise to fund a flood of new orders. The raise dilutes existing holders, so they're the ones eating the cost. It's also a warning for the rest of AI hardware the component crunch means more of these names will have to raise too.

Cracker Barrel $CBRL ( ▲ 6.11% )  

Higher after a surprise profit and a raised full year outlook. The Street had modeled a loss, so anyone short is now covering and the analysts who called for red ink have to walk their numbers up.

Nike $NKE ( ▲ 3.29% )  

Slipping after RBC cut it to sector perform, calling the turnaround slower and narrower than hoped. The patience trade just lost a believer, and it puts pressure on the other shops still rating it a buy to defend that call or follow RBC down.

Cava $CAVA ( ▲ 3.61% )  

Green while the tape is red, after UBS moved it to buy on the growth story. An upgrade like that lands it on momentum buy lists right as money rotates out of chips and into names that actually work on a down day.

DraftKings $DKNG ( ▲ 11.34% )  

Popped on strong May volumes, and the World Cup kicks off Thursday in Mexico City. Analysts call it the biggest betting event ever, which forces the whole sportsbook group to chase the same handle and likely pulls summer estimates higher across the sector.

First Majestic Silver $AG ( ▼ 3.67% )  

Lower with the whole metals complex as a firmer dollar and hike worries hit gold and silver. Leveraged miners feel it first, so anyone holding them on margin is the first to get flushed when real yields back up.

What to Watch

IPO’s

MarketBeat did an excellent job on this free IPO guide.

Oracle Earnings (After The Close) 
Oracle reports after the bell, today's read on whether the AI trade still has buyers. It runs the computing behind OpenAI, so the cloud numbers are a direct line into AI demand. A strong number could pull the chip group back up overnight.

10-Year Treasury Auction (1:00 PM ET)
The govt sells 39 billion dollars in 10-year notes this afternoon. On a day when rates are the whole story, it's a live test of who'll lend at these yields. Weak demand pushes yields up and stocks down.

- John

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