June 26th Market Overview

Happy Thursday

Market’s are knocking at all-time highs after getting exactly what it wanted to hear. The White House basically waved off the July tariff deadlines, calling them "not critical" - and just like that, the uncertainty that's been hanging over them since April started unwinding.

Let's dig in...

Executive Summary

1. Markets Push for New Records: The S&P 500 and Nasdaq briefly surpassed their all-time closing highs.
   

2. Tariff Threat Diminishes: The White House provided significant relief by stating the July 9 tariff deadline is “not critical” and could be extended.
   

3. Fed Leadership in Focus: Reports that Trump may announce his Fed Chair pick months earlier than usual sent the U.S. Dollar Index to its lowest level since early 2023.
   

4. Chipmakers Deliver:
   Micron Technology $MU ( ▲ 3.73% ) reported stellar earnings and guidance that blew past expectations, while Nvidia $NVDA ( ▲ 0.55% ) reclaimed its title as the world’s most valuable company.

Market Overview

Key Market Drivers

1. Tariff De-escalation: Press Secretary Karoline Leavitt's comment that the tariff deadline "is not critical" was exactly what the market wanted to hear, removing the uncertainty overhang that has lingered since April.
   

2. Fed Policy Speculation: The market is now pricing in a one-in-four chance of a rate cut next month, up from 12.5% a week ago. This shift is fueled by reports that Trump is considering an early Fed Chair appointment, allowing the successor to influence rate expectations before taking office.
   

3. Economic Data Mixed: While Q1 GDP showed a greater contraction than estimated, the market focused on timely data. Initial jobless claims fell to 236,000, signaling labor market stability. Durable goods orders jumped 16.4% in May, though driven almost entirely by volatile transportation orders.
   

4. Geopolitical Calm: The Israel-Iran ceasefire continues holding, reducing tail risk and contributing to oil price declines. This eases inflation concerns, giving the Fed more flexibility.
   

Stock Spotlight

Nvidia $NVDA ( ▲ 0.55% ) touched a fresh all-time high, becoming the world’s largest company by market cap. CEO Jensen Huang’s comments framing the company as an “AI infrastructure” play with multi-trillion-dollar opportunities in autonomous vehicles and robotic factories provided the catalyst.

Micron Technology $MU ( ▲ 3.73% ) delivered a powerful fiscal Q3 report with adjusted EPS of $1.91 and revenue of $9.30 billion, both topping estimates. Data center revenue more than doubled year-over-year, with Q4 guidance well ahead of consensus.

Core Scientific $CORZ ( ▼ 1.59% ) jumped after The Wall Street Journal reported the bitcoin miner is in acquisition talks with AI company CoreWeave. The news validates the hybrid miner strategy and highlights infrastructure value for AI computing.

Big Name Updates

Meta Platforms $META ( ▲ 0.25% ) doubled down on AI ambitions, reportedly hiring three researchers from OpenAI for its superintelligence push and announcing deals with Invenergy for nearly 800 MW of clean energy to power data centers.

Apple $AAPL ( ▲ 0.68% ) saw JPMorgan reiterate its Overweight rating but trim the price target to $230 from $240, citing potential iPhone 17 demand moderation.

Microsoft $MSFT ( ▼ 0.24% ) is seeing yields on its AI investments become “increasingly apparent,” according to Morgan Stanley, both in direct monetization and gaining corporate IT wallet share.

Other Notable Company News

Shell $SHEL ( ▲ 1.48% ) denied reports of early-stage talks to acquire rival BP $BP ( ▲ 2.81% ) .

Walgreens $WBA ( ▼ 0.3% ) beat Q3 estimates but pulled full-year guidance and skipped its earnings call, citing the pending Sycamore Partners deal and continued retail weakness.

AT&T $T ( ▼ 0.88% ) outlined plans to reach 70 million U.S. households with fiber by 2030, cutting energy use and maintenance costs.

Penn Entertainment $PENN ( 0.0% ) was upgraded to Market Outperform by Citizens Bank, seeing an inflection point ahead.

Sector Watch

Bond Market

Treasury yields edged lower, with the 10-Year settling around 4.256%. The move reflects positioning for a potentially more dovish Fed.

• The Dollar Index fell to three-year lows as Fed leadership uncertainty weighs on the currency

• Rate cut probability for July jumped to 25% from 12.5% a week ago

• Two Trump-appointed Fed officials have already signaled openness to July easing

Policy Watch

Fed Chair Succession:
Trump is reportedly considering announcing Powell’s successor as early as this summer, well ahead of the May 2026 term end.
The shortlist includes:
 Kevin Warsh, Kevin Hassett, Scott Bessent, David Malpass, and Christopher Waller.

• Early announcement could allow influence over rate expectations before taking office
• Two Trump appointees have already broken with Powell on July rate cuts

Trade Developments: While the White House softened tone on July 9 tariff deadlines, challenges persist. Western companies still struggle to secure rare-earth import approvals from China despite diplomatic assurances.

What to Watch

1. PCE Data Friday: The Fed’s preferred inflation gauge will be critical for July rate decisions. A soft reading would be good for the case for cuts later this year.
   

2. Nike and Walgreens Earnings: Results will offer insights into consumer health and retail environment challenges.
   Nike reports today after bell close.
   

3. July 9 Deadline: Though downplayed, markets will watch for official extensions or trade deal announcements to remove remaining uncertainty.
   
   
   Thanks for reading 🙂
   
   - John
   

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