May 26th Market Overview

Happy Monday

The S&P 500 and Nasdaq hit fresh record highs while the Dow slipped. Chips did the heavy lifting, and oil cooled as peace talks with Iran looked promising.

Big theme worth mentioning: traders have quietly moved from expecting rate cuts to pricing in a hike.

Let’s dig in...

Today's Big Picture

Micron Joins the Trillion Dollar Club

Micron $MU became the first US memory chipmaker worth a trillion dollars, its best day since 2011. The whole move came from one UBS note that more than tripled its price target, arguing AI has changed how memory gets valued. The rest of the memory group rode along. Memory is the new oil right now, but a move this big off a single note tells you sentiment is doing the work.

The Hormuz Hangover

Oil was choppy as Washington and Tehran inch toward a deal, with US crude settling lower. Even if the Strait of Hormuz reopens, do not expect cheap gas soon. Around 1,500 ships are still stuck waiting, and rebuilding oil inventories runs well into next year. Wall Street already has a name for it: the Hormuz hangover.

The Rate Cut Bet Is Flipping

Underneath the record highs, the real action is in rates. War-driven energy costs keep pushing inflation up, and consumer confidence slipped again in May as households point to prices at the pump and the grocery store. A month ago traders expected Fed cuts; now they are betting on a possible hike. That shift matters more than any earnings report this week.

Market Overview

Index Performance

Stock Spotlight

Apple $AAPL ( ▼ 0.24% )  
got a price target raise from Bank of America, up to $380. The thinking is simple. If AI assistants become the new front door to apps and shopping, Apple controls the phone, the payments, and the identity underneath it all.

Intel $INTC ( ▲ 2.4% )  
went the other way, hit with a downgrade from Northland. The stock has had a huge run this year, and the analyst sees data center spending slowing in 2027 as big cloud customers tighten their belts.

AutoZone $AZO ( ▼ 9.06% )  
fell after revenue came in light. Earnings beat expectations, but weak international sales dragged the quarter and shares took a hit.

Big Name Updates

BP $BP ( ▼ 4.01% )  
dropped after its board removed Chairman Albert Manifold over what it called governance and conduct problems. The board gave no detail, which left investors guessing.

Starbucks $SBUX ( ▼ 1.6% )  
stumbled on a badly timed promotion in South Korea, one of its biggest markets, and now faces boycott threats. Damage control is underway.

Eli Lilly $LLY ( ▲ 0.66% )  
agreed to buy three vaccine developers for close to $4 billion combined. It is putting its weight loss drug cash to work, expanding well beyond obesity.

Other Notable Company News

Oklo $OKLO ( ▲ 4.13% )  
was picked by the Department of Energy for advanced talks on turning surplus Cold War plutonium into reactor fuel, alongside European developer Newcleo.

Modine $MOD ( ▲ 13.98% )  
locked in a data center cooling deal worth more than $4 billion through 2029, plus a $165 million upfront payment.

Marvell $MRVL ( ▲ 6.26% )  
got an upgrade to buy at HSBC, which sees its networking chips as underrated in the AI buildout.

Madison Square Garden Sports $MSGS ( ▲ 3.15% )  
hit an all-time high after the Knicks swept their way into the NBA finals.

Wix $WIX ( ▲ 3.69% )  
is preparing there largest layoff in its history, with reports of 800 to 1,000 jobs cut.

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Sector Watch

Bond Market

Treasury yields fell across the board as bond traders returned from the long weekend to fresh hopes for a Middle East deal. The drop tracked easing oil prices. Still, lower oil has not shifted the rate outlook much. Thursday's inflation report from the Fed is the real test.

Policy Watch

Fiscal and Trade

War and tariffs are quietly raising the cost of building a house. Copper is near record highs, aluminum carries a steep US import tariff, lumber is up on Canadian import taxes and mill closures, and diesel sits well above pre-war levels. That squeeze is one more weight on an already slow housing market.

International

The US and Iran keep trading fire even as both sides say a deal is close.

• Trump said talks are proceeding nicely but kept military options on the table.

• Unfreezing Iran's funds is the last big sticking point, with Qatar mediating.

• The US struck missile sites in southern Iran while Iran fired at US drones and aircraft.

What to Watch

The Inflation Report Thursday

The Fed's preferred inflation gauge for April lands Thursday. After energy costs ran up during the war, this is the clearest read yet on whether that pressure is spreading. It feeds straight into the rate debate.

Enterprise Earnings

Salesforce $CRM reports Wednesday and Dell $DELL on Thursday. With AI and memory names leading the market, Dell's results are a real test of whether the hardware optimism holds.

The Consumer Check

Costco $COST and Dollar Tree $DLTR report Thursday. Two very different shoppers, one clean read on how households are handling higher prices.

Thanks for reading - you are now the more informed 🙂

- John

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