Morning Brief: S&P 500 & Nasdaq Log Five Straight Losing Sessions, Micron’s Blowout Earnings Boost Semiconductors

Key Snapshot

📉 The S&P 500 and Nasdaq posted five consecutive daily losses, marking the S&P’s longest losing streak in ten months. The Dow edged up 0.14% for the session and gained 0.60% across the week, while the Nasdaq shed 4.60% week-to-date.

💾 Micron’s blockbuster earnings fueled a more than 15% after-hours jump, triggering a broad rally across the entire semiconductor sector.

🛢️ August WTI crude finished the week down 8.73% at $69.23 per barrel, with Brent August crude tumbling 10.65% to $71.99/bbl; both benchmarks hit four-month lows.

📊 US May PCE inflation surged 4.1% year-on-year, breaking the 4.0% barrier for the first time since April 2023, leaving the Federal Reserve with rate hike options intact for 2026.

I. Market Outlook

Core Events

US May Personal Consumption Expenditures (PCE) Price Index jumped 4.1% YoY, the sharpest rise since April 2023 and the first breach above 4.0% in three years. Final Q1 GDP growth was revised higher to 2.1%.

Fed voter Kashkari shifted from dovish to hawkish, stating elevated inflation likely warrants one rate hike this year.

Trump issued a public threat against Iran on Saturday, warning the nation “may cease to exist”, while US military forces carried out airstrikes on southern Iran on Friday and Saturday.

Market Reaction

Semiconductor names staged a powerful rally: SanDisk rose over 21%, Micron Technology surged more than 15%, and Applied Materials climbed above 13%.

August WTI crude closed the session 3.74% lower at $69.23/bbl, bringing its weekly loss to 8.73%.

Exclusive Insight

Micron’s earnings print delivers critical market reassurance for the AI hardware space, with Q4 revenue guidance signaling the memory upcycle is far from peaking.

However, Apple’s 6% price hike lays bare tangible pressure from AI cost pass-through; the Magnificent Seven notched their worst weekly performance since reciprocal tariffs were imposed last year.

The 4%-plus PCE print is an alarming inflation overshoot alert under Chair Walsh’s tenure. Kashkari’s hawkish pivot signals the camp favoring 2026 rate hikes is expanding within the FOMC.

II. Overnight Market Performance

Summary

Micron’s robust earnings lifted chip stocks, yet Apple’s price hikes weighed on mega-cap tech giants, dragging the S&P 500 and Nasdaq into five straight daily losses. Crude oil fell more than 8% week-on-week, while gold staged a mild rebound.

— US Equities:

S&P 500: -0.05% close at 7,354.02, weekly loss 1.95%

Dow Jones Industrial Average: -0.09% close at 51,876.11, weekly gain 0.60%

Nasdaq Composite: -0.24% close at 25,297.618, weekly loss 4.60%

💡 Semiconductors outperformed sharply: SanDisk +21%+, Micron Tech +15%+, Applied Materials +13%+. All seven mega-cap tech leaders traded lower: Apple lost over 6%, Microsoft and Amazon fell more than 3%, and Nvidia slipped above 1%. The S&P 500 locked in its longest losing run in ten months, with the Magnificent Seven logging their steepest weekly decline since last year’s reciprocal tariff measures.

— European Equities:

STOXX Europe 600: -0.68% close at 635.88, weekly gain 0.04%

FTSE 100 (UK): -0.21%

CAC 40 (France): -0.75%

DAX 30 (Germany): -1.25%

💡 European benchmarks pulled back after hitting all-time highs on Thursday, as the tech selloff spilled across regional markets with Germany’s DAX leading losses.

— Fixed Income:

US 10-year Treasury yield stood around 4.37%, down roughly 2 bps intraday and 8 bps for the full week.

US 2-year Treasury yield hovered near 4.09%, shedding 3 bps on the day and 9 bps week-to-date.

💡 PCE data aligned broadly with consensus, with inflation risks already fully priced into markets, driving a weekly decline across Treasury yields. The 2-year rate hit its lowest level in more than a week following the Fed’s hawkish policy signals last meeting.

— Commodities:

August WTI crude futures: -3.74% close at $69.23/bbl, weekly loss 8.73%

August Brent crude futures: -4.34% close at $71.99/bbl, weekly loss 10.65%

COMEX June gold futures: +1.2% close at $4,078.7/troy oz, weekly loss 3.44%

💡 Sustained smooth vessel transit through the Strait of Hormuz combined with soft demand fears triggered an over 8% weekly crash in crude, returning oil prices to pre-US-Iran conflict levels. Gold rebounded off the $4,000 support mark but remained down more than 3% for the week.

— Foreign Exchange:

US Dollar Index: -0.07% intraday to close at 101.357

EUR/USD: 1.1386

USD/JPY: 161.79

💡 The US Dollar Index eased moderately from its 13-month peak as PCE inflation did not top upper-end market forecasts, offering a brief reprieve for risk assets.

— Crypto Assets:

Bitcoin hovered around the $60,000 threshold, down roughly 5% week-on-week and nearly 20% for the month.

💡 Rising Fed hike expectations bolstered the US dollar, alongside the expiry of nearly $10bn in Bitcoin options, pressuring risk assets amid tightening liquidity conditions.

III. Macro News

⚠️ Trump threatens Iran “may cease to exist”; US airstrikes hit southern Iran for two consecutive days, Iranian military vows “hell-level” retaliatory strikes

Trump issued the threat on Saturday. US military forces launched strikes across southern Iran on Friday and Saturday. Iran’s military warned Sunday it would launch devastating counterattacks against eight key US military installations and take harsher action against vessels violating transit rules in the Strait of Hormuz.

Insight: Mere days after the US-Iran framework accord was signed, military hostilities have re-escalated. Trump’s existential threat paired with Iran’s pledge of severe retaliation underscores that implementing the truce agreement carries far greater complexity than its signing. Maritime safety in the Strait remains the core swing variable.

📊 US May PCE inflation surges 4.1% YoY, first print above 4.0% since April 2023; final Q1 GDP revised up to 2.1%

US May PCE Price Index rose 4.1% year-on-year, marking the steepest jump since April 2023. Final first-quarter GDP growth was lifted to 2.1%.

Insight: The above-4% PCE reading delivers an unprecedented inflation overshoot warning under Chair Walsh. The Fed will solidify its stance retaining 2026 rate hike options, while Kashkari’s hawkish pivot confirms the pro-hike bloc within the FOMC is expanding.

🏛️ Walsh rolls out key initial appointments: two Fed economists named policy advisors focused on interest rate research; his first overseas public appearance at the ECB Forum this week

Walsh appointed two Federal Reserve economists as dedicated advisors concentrating on monetary rate analysis. Ahead of the July Fed policy meeting, Walsh has two high-profile speaking engagements, with this week’s ECB forum marking his debut overseas appearance.

Insight: Walsh is rapidly assembling his core policy team. Markets will closely parse hawkish/dovish signals during his joint panel with Lagarde at the European Central Bank Forum.

🏦 Bank of America issues stark warning: a broad risk-off market storm may hit this summer. Rare net equity outflows emerge across US stocks, with extreme divergence between cloud giants and memory chip stocks

Bank of America flagged the risk of a full-scale flight-to-safety episode sweeping markets this summer. US equities are seeing unusual net capital outflows, with a stark performance split between cloud hyperscalers and semiconductor memory names, as markets grapple with uncertainty over trillions in AI capital expenditure returns.

📉 Gold plunges 28.9% in five months from $5,595 to $3,978, outpacing full-year 2013 losses

Gold’s multi-month rally has unraveled dramatically: prices crashed 28.9% over five months from a peak of $5,595 down to $3,978, exceeding gold’s total annual drawdown recorded in 2013. Three concurrent bearish drivers are at play: the Fed’s hawkish policy shift, the dollar surging to a 13-month high, and complete evaporation of Iran-related geopolitical risk premiums.

IV. Corporate News

💾 Micron’s blowout earnings: quarterly revenue more than tripled, robust forward guidance signals tight AI memory supply will persist past 2027, stock jumps over 15% after hours

Micron Technology posted its strongest single-day performance since May 26, climbing more than 15%. SanDisk rose over 21% and Applied Materials gained above 13%.

— Micron’s operational results push back widespread bearish narratives around cooling AI demand. Memory semiconductors stand as the sole outperforming segment within the broader chip sector, validating the thesis that memory represents an underappreciated bottleneck for AI infrastructure buildout.

🍎 Apple announces price hikes for iPad and MacBook product lines, citing unsustainable AI-driven memory and chip input costs; stock slumps over 6%

Apple rolled out price increases across its iPad and MacBook lineup, sending its share price down more than 6% and dragging the entire tech complex lower.

— Apple’s pricing adjustment acts as a landmark indicator of AI cost pass-through to end consumers. Mounting AI hardware expenses are being fully transferred to retail buyers, with the Magnificent Seven posting their worst weekly performance since last year’s reciprocal tariff implementation.

🤖 OpenAI launches the GPT-5.6 model series, limiting public access at the request of US authorities, and states restricted rollout should not become a permanent standard practice

— OpenAI unveiled its new model suite after delaying its IPO plans. The comment that limited distribution should not be permanent signals reservations over government regulatory intervention, amplifying tensions between AI innovation and state oversight frameworks.

📈 Nasdaq exchange confirms SpaceX will be added to the Nasdaq 100 Index on July 7

— Mere weeks post-listing, SpaceX’s inclusion in the Nasdaq 100 will trigger large-scale inflows from passive index-tracking funds, expanding Musk’s capital market influence across risk assets.

V. Key Focus For Today

🇰🇷 Samsung unveils a KRW 1,000 trillion advanced industrial investment plan – the largest corporate spending commitment in South Korean industrial history, further clarifying its core semiconductor strategic priority.

🏛️ ECB Annual Central Bank Forum (June 29 – July 1): Walsh’s maiden overseas public appearance alongside Lagarde and other global central bank chiefs; markets will extract clear signals on his monetary policy bias.

📊 Weekly Calendar Reminders: China June PMI data, US June Nonfarm Payrolls report due Thursday.