June 16th Market Overview

Happy Tuesday

The Dow closed at a record while the Nasdaq fell, and the split came down to one thing. Oil kept dropping, so traders pulled money out of the crowded chip trade and put it into banks and industrials.

SpaceX popped again early, then handed most of it back by the bell. It all sets up tomorrow, when Warsh runs his first Fed meeting with warm inflation in one hand and cooling oil in the other.

Let’s dig in...

Today's Big Picture

1. The Hot Names Took the Day Off
The Dow closed at a record while the Nasdaq fell, and the gap says it all. With oil sliding, traders sold the crowded AI trade and bought banks and industrials instead. AMD led the chips lower and SpaceX gave back most of an early pop, while JPMorgan and Caterpillar pushed the Dow to new highs.

2. Oil Closed at Its Lowest Since March 
Brent settled under $80 for the first time since March, and the big banks moved with it. Goldman cut its fourth-quarter Brent target to $80 from $90, and Morgan Stanley sees only half the lost oil back by September. The barrels are coming back, just slower than the Friday headline makes it sound.

3. The Fed Lands Tomorrow 
Warsh's first decision comes Wednesday, and almost nobody expects a rate move. What everyone wants is the dot plot and how he reads inflation now that oil has cooled. He talked dovish on the way in. Today gave him cover to stay that way.

Market Overview

Index Performance

Stock Spotlight

Western Digital $WDC ( ▲ 5.48% )  
was the one chip name that worked today. Morgan Stanley raised its target to $650 and kept its buy rating, and the stock climbed while the rest of the group sold off.

AMD $AMD ( ▼ 5.89% )  
led the chips lower, but the news under the hood was good. It is buying memory firm MEXT and signed a 30 megawatt AI infrastructure deal with Rackspace.

Tesla $TSLA ( ▼ 1.06% )  
got a vote of confidence from Goldman Sachs, which now sees about 420,000 deliveries this quarter, up from 405,000.

Novo Nordisk $NVO is moving to sell its Wegovy weight-loss pill in China. The CEO told Reuters a filing is coming within months.

Big Name Updates

General Motors $GM ( ▼ 1.86% )  
says buyers are backing away from big pickups as gas prices bite. People are shifting toward cheaper, more efficient cars, though GM is not sure the move sticks.

Coinbase $COIN ( ▲ 0.6% )  
is rolling out futures tied to stock indexes for US traders, with leverage up to 20 times. It is another step toward becoming the everything exchange.

Alibaba $BABA ( ▼ 1.41% )  
put out its first AI models built for robots. It is China's bet that the next phase of AI is machines doing real work, not just chatbots.

Qualcomm $QCOM ( ▼ 2.86% )  
rose on a report it is in talks to buy AI chip startup Tenstorrent for $8 to $10 billion. The deal would push it deeper into AI silicon.

Other Notable Company News

Alumni Ventures
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Olin $OLN ( ▼ 6.64% )  
and Huntsman $HUN are merging in an all-stock deal to form OlinHuntsman, with the close set for 2027.

Palantir $PLTR ( ▼ 1.08% )  
got a fresh look from Wolfe Research, which resumed coverage at hold after rating it a sell.

Mobileye $MBLY ( ▲ 1.21% )  
says it will launch a self-driving ride-hailing business in the US by 2027.

Hewlett Packard Enterprise $HPE ( ▲ 0.01% )  
teamed up with eight quantum computing firms, including Intel and Rigetti, to build a combined supercomputing platform.

BlackRock $BLK ( ▲ 0.86% )
is cutting about 200 more jobs worldwide.

Nebius $NBIS ( ▲ 2.12% )
closed its acquisition of AI firm Eigen.

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Sector Watch

Bond Market

Treasuries sat quiet ahead of the Fed. The 10-year yield held near 4.43 percent and the dollar barely moved. The Treasury sold 20-year bonds today without much drama. Tomorrow is all about the Fed, with retail sales out in the morning too.

Policy Watch

Plenty moving in Washington and abroad, and the backdrop looks friendlier than it did a few days ago.

Iran and Oil The US and Iran sign Friday in Switzerland, and the Strait of Hormuz reopens the same day. Trump confirmed the passage stays toll free beyond the first 60 days, which keeps a lid on shipping costs down the road.

Around the World

• The Bank of Japan raised its rate to a 31-year high to get ahead of inflation.

• China retail sales fell for the first time in over three years. A softer Chinese consumer means less pressure on global prices.

• Trump is at the G7 in France, where the Iran deal is the main topic.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

The Fed, Tomorrow
The decision drops at 2pm Eastern, with retail sales out earlier in the morning. Watch the dot plot for how many hikes officials now pencil in, and listen for whether Warsh leans dovish or plays it safe in his first press conference.

The Rotation 
Today's shift out of chips and into banks and industrials was sharp. Watch whether it sticks or it was just a one-day reaction to cheaper oil. A BofA survey out today called semis the most crowded trade in its history, so a little air coming out of that group is healthy, not scary.

Thanks for reading - you are now the more informed 🙂

- John

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