May 27th Market Overview

Happy Wednesday

Dow carved out another record while the S&P and Nasdaq barely moved. Memory chips kept running while the rest of the semi trade cooled off.

Oil keeps getting whipped around by an Iran headlines that don't hold up. It’s worth noting Iran negotiations seem to be on the more positive side with all involved looking to get the straight open asap.

Let’s dig in...

Today's Big Picture

The Rotation Is On 

The chip rally finally paused. Nvidia closed lower for a fourth straight day. Arm, Qualcomm, and Marvell all sold off with it. The Dow hit a fresh record while the S&P and Nasdaq sat flat. First real sign of money leaving semis and moving into industrials and defensives since the AI trade took over.

Cybersecurity Got Gutted 

Zscaler dropped 31% on weak revenue guidance for the current quarter. Palo Alto and CrowdStrike fell in sympathy. The cybersecurity ETF lost more than 5% on the day. Salesforce reports tonight and the broader software group is on edge after a rough year.

Apple Won't Quit 

Apple hit a new all-time intraday high at $312.77, the sixth gain in seven sessions. Market cap is now $4.5 trillion, behind only Nvidia and Alphabet. Tim Cook is stepping down later this year and the stock keeps making highs into his exit.

Market Overview

Index Performance

Stock Spotlight

Apple $AAPL ( ▲ 0.58% )  
hit a new intraday high. Tim Cook's last year at the top is going out with a bang. Market cap is now $4.5 trillion, behind only Nvidia and Alphabet.

Rocket Lab $RKLB ( ▲ 3.52% )  
cleared a key design review on the Space Development Agency's missile warning constellation. The contract is worth roughly $816 million. Combined with prior awards, total contracts with that agency now top $1.3 billion.

Ford $F ( ▲ 3.62% )  
is poised for its highest close since 2022. The move has nothing to do with cars. Investors are treating Ford's energy storage business as an AI-adjacent play on power demand.

Boeing $BA ( ▲ 3.06% )  
said it's ready to lift 737 MAX production to 47 jets a month after passing a major FAA review. Picking up the pace is the key to cutting cash burn this year.

Big Name Updates

JPMorgan $JPM ( ▼ 2.53% )  
slid after Jamie Dimon told investors the bank could put $10 to $20 billion to work on an acquisition in the next couple of years. He also said full year costs would land closer to $106 billion, about a billion higher than planned. Dimon framed the extra cost as a good problem since it's tied to stronger trading and banking fees.

Tesla $TSLA ( ▲ 1.43% )  
had a curious headline. Elon Musk reportedly floated a Tesla and SpaceX merger with colleagues. Meanwhile the FAA is requiring SpaceX to investigate its failed booster landing before the next Starship launch.

Exxon Mobil $XOM ( ▼ 0.94% )  
shareholders approved moving the company's legal home from New Jersey to Texas. Exxon has been headquartered in Texas since 1989 but incorporated in New Jersey since 1882. CEO Darren Woods argued Texas courts better understand the energy business.

Taiwan Semi $TSM ( ▲ 2.93% )  
is raising 3nm chip prices meaningfully in the second half of this year. Another price hike is possible in 2027. The company also pledged a bigger bonus to employees after public complaints about quarterly payouts.

Other Notable Company News

Dick's Sporting Goods $DKS ( ▼ 5.2% )  
cut full year earnings guidance, citing heavy World Cup marketing spend pressuring margins.

Bath & Body Works $BBWI ( ▲ 10.41% )  
traded higher after guiding Q2 above estimates.

Lululemon $LULU ( ▲ 3.92% )  
settled its proxy fight with founder Chip Wilson. He gets to name two new directors and agreed to stop publicly criticizing the company for 18 months.

Hims & Hers $HIMS ( ▲ 7.17% )  
director David Wells bought 48,400 shares at $24.235 in the open market, worth about $1.17 million.

IREN $IREN ( ▲ 13.27% )  
signed a $1.6 billion purchase agreement with Dell for Blackwell systems at its Texas

SoFi $SOFI ( ▲ 1.97% )
is opening its stablecoin to all 15 million customers in Q3. SoFi is the first national bank to offer one on a public blockchain.

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Sector Watch

Bond Market

The 10-year barely moved today. Tomorrow brings the April PCE reading, the Fed's preferred inflation gauge. Treasury also auctions $22 billion in 30-year bonds tomorrow. The PCE print is the most likely catalyst to move yields this week.

Policy Watch

Iran 
The Strait of Hormuz is still essentially shut. Confirmed crossings fell to just two on Monday, down from 20 over the weekend. Both ships used the route hugging Iran's coast. Trump is convening his cabinet at the White House today, moved from Camp David due to weather. Rubio said any deal still takes a few days to finalize.

Fed Speakers Today

• Governor Lisa Cook on AI and the economy at Stanford

• Vice Chair Philip Jefferson on the global economy from Tokyo

• NY Fed's John Williams from Iceland on Thursday

What to Watch

PCE Inflation Thursday 

The Fed's preferred inflation read drops in the morning. With oil getting whipped around by Iran headlines and the personal saving rate at its lowest since 2022, this number matters more than usual.

Salesforce, Marvell, Snowflake Tonight

Marvell tells us how AI hardware demand is shaping up for the back half of the year. Salesforce tells us whether enterprise software has bottomed.

Dell Earnings Thursday 

Melius hiked its price target to $380 from $245 ahead of the print. The bull case is agentic AI server demand layered on top of regular AI server growth.

Thanks for reading - you are now the more informed 🙂

- John

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