June 24thMarket Overview

Happy Wednesday

Most stocks opened green and gave it all back. Same story as yesterday, the chips dragged everybody down again.

Oil keeps falling. We're basically back to where crude was before the whole Iran mess started, which is crazy when you think about where this looked a few weeks ago. Cheaper oil is good for all of us, even if the gas station is always the last to get the memo (I filled up at Costco yesterday for $3.45).

Micron reports after the close tonight. It's about as clean a read as we'll get on whether all this AI spending is actually pulling through real demand and most importantly, how the market reacts to the numbers they put out.

Let’s dig in...

Today's Big Picture

1. Oil Is Back To Prewar Prices
Brent fell below $75, WTI under $70. First time since the Iran war kicked off. Tankers are moving through the Strait of Hormuz again after last week's US-Iran deal, and even with traffic still light, oil flowing means cooler inflation later this year. The market's betting the peace holds. So far that bet is paying off.

2. AI Nerves Return Before Micron
Tech took it on the chin again as investors got jumpy about high valuations and the giant bills piling up for the AI buildout. The Mag Seven plus Broadcom and Oracle have lost about $2.7 trillion this month. Micron reports tonight, and it's the one everyone's watching for a real read on demand. My read: the demand is still there, what's getting marked down is how much people will pay for it.

3. Gold Slips Under $4,000 As The Dollar Climbs
Gold dropped below $4,000 for the first time in seven months, and Bitcoin fell under $60,000. The same thing is driving both, a strong dollar and a Fed in no rush to cut. New Chair Kevin Warsh has stayed hawkish, so traders are now betting on a possible hike later this year. These assets aren't broken. The dollar is just running the show right now.

Market Overview

Index Performance

Stock Spotlight

Cerebras Systems $CBRS ( ▼ 19.6% )  
sank after its first report since going public, even with revenue nearly doubling from a year ago. The hangup was guidance for negative margins as it spends big to expand. It also locked in a deal worth more than $20 billion with OpenAI and an inference tie-up with Amazon's cloud.

AMD $AMD ( ▼ 0.85% )  
got a sharp target bump from UBS, to $670 from $455, on bets it wins server CPU share as agentic AI workloads grow.

Wendy's $WEN ( ▲ 26.06% )  
ran higher after the WallStreetBets crowd piled in, with trading briefly halted for volatility. A new CFO from Potbelly gave the meme a little real news to stand on.

Big Name Updates

Alphabet $GOOG ( ▼ 0.63% )  
L joins the Dow on Monday, taking Verizon's $VZ spot. It gives the old index a real dose of AI, cloud, and digital ads.

Nvidia $NVDA ( ▼ 1.12% )  
chips that are banned for export have more than doubled on China's black market, per the FT. Demand over there is not cooling off.

Apple $AAPL ( ▲ 0.23% )  
is set to start mass production of its first foldable iPhone in late July, with Foxconn on the initial run and a September reveal expected.

Tesla $TSLA ( ▼ 1.61% )  
teamed up on a 16 gigawatt energy pact, pooling home batteries and smart thermostats for utilities and data centers. The clever part is it needs no new hardware or land.

Other Notable Company News

FedEx $FDX ( ▲ 0.28% )  
beat on revenue and earnings in its last quarter with the freight unit it just spun off, but the stock still fell on high expectations.

Hertz $HTZ ( ▼ 38.44% )  
dropped after guiding quarterly earnings to the low end and announcing a $100 million stock offering.

Strategy $MSTR ( ▼ 9.23% )  
slid as Bitcoin's drop and pressure on its preferred stock weighed on the shares.

KB Home $KBH had its best day in years after beating on revenue, a bright spot in an otherwise soft housing read.

Take-Two $TTWO ( ▼ 2.01% )  
opens GTA VI pre-orders Thursday, with the game out November 19.

Boeing $BA ( ▲ 1.23% )  
won a $2 billion US defense contract to extend a military satellite program.

Today’s Sponsor

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The ones supplying the chips, the cloud capacity, and the data tools everything else runs on.

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Sector Watch

Bond Market

Treasury yields fell with oil today as inflation fears cooled. The 10-year dropped back below 4.5, roughly where it sat before last week's hawkish Fed forecasts.

• The dollar kept climbing, which makes commodities pricier for overseas buyers.

• The Japanese yen hit a near 40-year low, and Tokyo is hinting it may step in to support it.

Policy Watch

Oil and Gas 
Trump went after oil companies for not passing along cheaper crude, saying pump prices should be falling faster, and told the Justice Department to look into it.

• The catch is that stations lower prices slowly after a shock, so drivers won't feel the relief right away.

• Treasury Secretary Scott Bessent says inflation cools on its own once energy supply normalizes.

Iran 
Trump says Iran promised no tolls or fees for ships crossing the Strait of Hormuz, and warned the talks end immediately if that turns out to be false.

Housing 
Trump abruptly canceled the signing of a major housing affordability bill, saying he won't sign until Congress passes his voter ID law. It is the first big housing bill since the financial crisis, now stuck in limbo.

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.

Micron Earnings Tonight 
The memory maker reports after the close, and it's the cleanest read we'll get on AI demand. Watch the guidance and anything on memory pricing more than the headline number.

PCE Inflation Thursday
The Fed's favorite inflation gauge lands tomorrow. A cool number takes pressure off stocks and off Warsh.

Whether The Oil Peace Holds 
Tankers are moving through Hormuz, but some shippers are still waiting to see if it sticks. Hold the calm and crude keeps drifting lower, which the whole market would welcome.

Thanks for reading - you are now the more informed 🙂

- John

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