June 25thMarket Overview

Happy Thursday

The Dow closed at a record while the Nasdaq slid again. Money is rotating into industrials and banks. Nothing scary here. This looks like buyers taking a breath and hunting for value outside of tech.

Let’s dig in...

Today's Big Picture

1. The Memory Squeeze Hits Your Wallet

Micron's revenue quadrupled to $41.46 billion. It locked in 16 long-term supply deals and said the memory shortage runs past 2027, so this isn't a one-quarter pop. Scarce memory is great for the chipmakers and brutal for everyone who buys from them. Apple and Microsoft both raised hardware prices today to cover it, which is how a chip shortage quietly becomes your inflation.

2. The Fed Is Talking Hikes Now

The Fed's favorite inflation gauge hit its highest level since late 2023, right in line with expectations, so the market shrugged. But here's the shift that matters. Oil and the AI buildout are both pushing prices up, and new chair Kevin Warsh cares about that more than slow growth. Traders now put better than even odds on a rate hike in September. The cut story we opened the year with is done, and that's a big reason money is leaving pricey tech right now.

3. Wendy's Is the New Meme Stock

Reddit traders piled into Wendy's and squeezed the shorts, who had bet against nearly a third of the stock. It ran hard, then gave most of it back by the close. Feels like 2021. Wendy's itself doesn't matter much here. The signal does: risk appetite is creeping back into corners of the market, and I'm watching whether it spreads to other beaten-down names tomorrow.

Market Overview

Index Performance

Stock Spotlight

Qualcomm $QCOM ( ▲ 3.65% )  
is moving into data center chips and servers, chasing AI money beyond phones. It set a new target of $40 billion in non-phone revenue by 2029, nearly double its old goal. Nvidia slipped on the news.

Strategy $MSTR ( ▼ 8.85% )  
finished at a two-year low. Michael Saylor's company is basically a leveraged bet on Bitcoin, and Bitcoin just broke below $60,000.

IBM $IBM ( ▼ 1.7% )  
showed off a chip smaller than one nanometer, the size of a fingernail with about 100 billion transistors packed in. Production is still five years out, so this is a someday story, not a today one.

BlackBerry $BB ( ▲ 18.85% )  
posted its first positive operating cash flow in nine years. Yes, that BlackBerry. Its QNX software now runs in 275 million cars, and the old phone company is quietly an AI and automotive play now.

Big Name Updates

JPMorgan $JPM ( ▲ 0.58% )  
named Doug Petno and Troy Rohrbaugh co-presidents and handed each a $30 million bonus to stick around. It's the clearest sign yet of who might replace Jamie Dimon.

Alibaba $BABA ( ▼ 4.61% )  
fell to a 16-month low after Anthropic accused it of illegally copying its Claude AI model. The fight has investors nervous about Chinese tech's access to US AI.

Bayer $BAYRY ( ▲ 17.24% )  
won big at the Supreme Court, which ruled 7-2 that it doesn't have to warn customers about cancer risks tied to its Roundup weedkiller. That clears out thousands of lawsuits, and the stock rose.

Coca-Cola $KO ( ▼ 0.15% )  
is fighting a ruling that puts it on the hook for more than $20 billion in back taxes. It asked an appeals court to throw out the IRS decision.

Other Notable Company News

McCormick $MKC ( ▲ 1.68% )  
beat on earnings but flagged rising costs from the Iran war eating into margins.

Darden $DRI ( ▼ 0.32% )  
gave weak profit guidance for next year, and Olive Garden sales came in soft.

Sandisk $SNDK ( ▲ 22.4% )  
climbed with the rest of the memory group on the back of Micron's quarter.

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Sector Watch

Bond Market

Quiet day for bonds. The 10-year yield barely moved even with the hot inflation print, which tells you traders saw the number coming. The dollar slipped a touch. Nothing here screaming for attention, which after this week is its own kind of good news.

Policy Watch

The Fed isn't blinking. New York Fed's John Williams said policy is set up right to bring inflation back down, and he expects the hot readings to ease over the next few quarters. Worth noting: Alan Greenspan died this week at 100, and new chair Kevin Warsh is reportedly running a version of his old playbook.

On the fiscal and international front:

• First-quarter growth got revised up, but consumer spending was the weakest in four years, so it's a mixed picture under the hood.

• Traffic through the Strait of Hormuz is bouncing back, even after Iran's Revolutionary Guard reportedly hit a cargo ship there today.

• Energy Secretary Chris Wright said Iran will be back to exporting about as much oil as it did before the war.

• The Army is leasing land on its bases to mine critical minerals, part of the push for a domestic supply chain.

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.

Consumer Sentiment

The University of Michigan drops its final June survey tomorrow morning. After oil's run-up, I want to see if regular folks still feel okay about spending.

Alphabet Joins the Dow

Alphabet joins the Dow on Monday. Funny thing: it'll carry less weight than you'd think, because the Dow ranks by share price, not company size.

Thanks for reading - you are now the more informed 🙂

- John

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