STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 6/25/26 (a/o 2:00 pm)
DOW 51,938 (+90), S&P 500 7,363 (+5), Russell 2000 3,001 (+14), NYSE FANG+ 16,571 (-30), ICE Brent Crude $75.47/barrel (+$1.73), Gold $4,048/oz (+$39), Bitcoin ~59.4k (-1633)
MAC Desk Commentary:
US equities were mixed yesterday following Tuesday’s Tech and momentum-driven weakness. Oil prices continued to be under pressure with ICE Brent breaking below its 200d ma. This finally woke up Treasury buyers with yields falling between 5-10bps across the curve. These two factors sent housing and travel related stocks sharply higher. The S&P 500 fell slightly while the equal-weight rose 0.7% as we continued to see a significant rotation. Tech tried to rally earlier in the session but faded as we hit the afternoon, though it managed to close off its lows ahead of Micron earnings after the close.

The company blew away estimates and provided exceptionally strong guidance. The stock was up nearly 20% overnight,  back to where it closed on Monday, but has given back some of those gains. The results unequivocally show the supply-demand imbalance in memory as AI continues to drive demand across industries: data center, auto, consumer, robotics, etc.  Management sees industry tightness lasting beyond 2027, while discussion of 16 SCAs (Strategic Customer Agreements) addressed the durability of that demand and revenue.

The Micron earnings helped tech stocks bounce overnight. It was also a very busy morning of economic data which showed resilient consumer spending, elevated (though not out of hand) inflation and a solid labor market. The better than feared inflation data helped yields at the front end move lower and the USD to pullback from the overnight highs. After the release Russell and Dow futures firmed up.

However, shortly before the open the other side of the Micron trade veered its head. Apple (-5%) announced it was increasing prices significantly across its suite of iPads and MacBooks. This wasn’t completely out of left field as Tim Cook suggested price increases were coming in a recent interview. The company said, “The consumer electronics industry is facing an unprecedented challenge.  The rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage. We have never seen a component price increase this much, this quickly.” Over the last couple of months markets have clearly taken note of the zero-sum game as the hyperscaler spending accretes to the memory/semiconductor suppliers. This is now starting to seep into electronics markets as well, Microsoft also noted that memory/storage costs are up 2.5X for their Xbox and raised prices again.  
Equity markets opened higher but right after the open hyperscalers got hit hard, semis gave up some of the gains, software continued to be under pressure and crypto puked.  The S&P 500 briefly broke below its 50d ma turning lower (it has since recovered) but the rotational activity helped to push the equal-weight, Dow, Russell 2k and S&P 400/600 indices to fresh all-time highs. That rotational activity has been very extreme throughout this week. There are some fundamental/macro factors driving this but it may also be partially related to end of quarter positioning.  
Over to the data. Headline PCE was more or less in line with consensus, rising 0.4% versus last month and 4.1% versus last year- the highest since April 2023. Core was right inline as well (0.3% / 3.4%). Goods rose 0.4%, easing from 0.7% last month, while Services rose 0.5%. Personal Income was solid rising from last month and stronger than expected. Personal spending rose, a bit more modestly, but also came in above estimates. After the prior GDP estimate was revised lower from 2.0% to 1.6%, the Final Q1 GDP reading was revised back up to 2.1%, primarily due to downwardly revised imports, partially offset by lowered consumer spending. Weekly claims fell to 215k from 226k, while Continuing claims ticked up slightly. 
Treasury yields were flat to slightly higher ahead of the data but fell on the news especially at short end. The US Dollar Index also moved slightly lower as yields came in.

  • US 2yr -4bps to 4.11%, 5yr -3bps to 4.15%, 10yr -1bps to 4.39%, 30yr +1bps to 4.84%
  • USD index: -$0.19 to $101.20
Oil prices were down overnight amidst headlines that Iraq was threatening to leave OPEC should their quota not be increased. However, prices are now modestly higher as there were reports of a ship hit in the Strait and that Iran is working on a plan to charge fees. After yesterday’s sharp selloff metals are bouncing though prices are holding completely within yesterday’s range.  Right around the open along with the tech selloff crypto moved sharply lower as well but has bounced modestly. Bitcoin made a new YTD low trading down to 58k. Ethereum tested its YTD low just over 1.5k. Discussion around miner economics is increasing as production costs have exceeded block revenue for many, which could be forcing BTC selling from their reserves. The Strategy/Stretch dynamic also remains front and center both were down 10% at the lows. 
Moving around the globe. Japan’s Nikkei ended two days of declines by ripping more than 4% overnight. Tech names rode Micron’s earnings tailwinds, including memory peer Kioxia (+12%), which also announced plans for an ADS listing in April/May next year. Advantest (+15%), Tokyo Electron (+8%) and SoftBank (+8%) also ripped higher. South Korea’s KOSPI jumped 5% overnight with SK Hynix up 13%. the China’s markets were mixed, with the Hang Seng under pressure again while Shanghai posted a modest gain. The chasm between tech hardware and software/consumer-facing tech remains wide. Alibaba fell over 4%, dragging down Hang Seng Tech after Anthropic brought the latest round of AI model “adversarial distillation” accusations.  European equites were up over 0.5%. No surprise seeing tech names among the best performers (ASML +5%, Infineon +4%). German consumer confidence crept higher but was below consensus. France also ticked higher. 
Within the S&P 500 5 of 11 sectors are higher breadth is still positive but not quite as strong as the last couple of days with 3:2 adv:dec. Comm services and consumer discretionary are down ~1.5% with the mega-cap tech stocks in each sector doing much of the damage. Within the former media stocks are also moving lower amidst competition concerns while telecom co’s are modestly higher. Within consumer discretionary retail and apparel stocks are also moving lower while auto-related is outperforming. Consumer staples is also down ~1.5% with retailers and CPG companies under pressure while food and tobacco stocks rally.

Industrials are leading to the upside up nearly 2% with machinery and building products stocks outperforming. Healthcare is up another 1% the best performing sector WTD up >4% and is now slightly higher YTD. Merck KGaA is buying Bio-Techne Corp for ~$11B the most recent in a string of M&A deals. This is helping other life science and tool companies move sharply higher. This leaves financials as the only sector still down YTD though just barely. Within financials crypto related, exchanges and financial data analytics companies are lower. Last night the Fed released its bank stress tests leading to a host of companies announcing increases in their capital return programs. Money center and regional banks are moving higher. Energy and materials are both up ~1% with the commodity bounce. 
The big event on the calendar for tomorrow is the semi-annual Russell Rebalance.

Earnings:
After-Market: FDXF
Pre-Market: APOG

Economic Data:
US:
  • PCE m.m / y.y: 0.4% / 4.1% vs 0.5% / 4.1% cons, prior 0.4% / 3.8%
  • Core PCE m.m / y/y: 0.3% / 3.4% vs 0.3% / 3.4% cons, prior 0.3% / 3.3%
  • GDP q/q (Final): 2.1% vs 1.6% prior revision
  • Durable Goods m.m: -4.5% vs -4.5% cons, prior 8.5%
  • Ex-Transports: 1.3% vs 0.6% cons, prior 1.4%
  • Non-defense, Ex-aircraft: 1.6% vs 0.6% cons, prior -0.7%
  • Personal Income / Spending m.m: 0.7% / 0.7% vs 0.4% / 0.6% cons, prior 0.0% / 0.5%
  • Jobless claims: 215K vs 225K cons, prior 226K
  • Continuing claims: 1821K vs 1800k cons, prior 1800k
Global:
  • Australia Unemployment rate: 4.4% vs 4.4% cons, prior 4.5%
  • Germany GfK Consumer Confidence: -29.2 vs -27.6 cons, prior -29.7
  • France Consumer Confidence: 84 vs 83 cons, prior 82


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