Tech Rotation Hands the Dow a Record as Micron's Blowout Steadies the AI Trade Late

Key Market Levels — Close Jun 25, 2026

• S&P 500: 7,357.49 (▼ 0.01%)
• Dow Jones: 51,920.62 (▲ 0.14%)
• Nasdaq: 25,358.60 (▼ 0.46%)
• STOXX 50: 6,272.25 (▲ 0.93%)
• FTSE 100: 10,529.89 (▲ 0.65%)
• Nikkei 225: 72,366.34 (▲ 4.61%)
• Gold: $4,009.07 (▼ 0.45%)
• Brent Oil: $74.19 (▼ 1.42%)
• WTI Oil: $70.79 (▼ 1.58%)
• EUR/USD: 1.1375 (▲ 0.04%)

US Market Update

This was a week of two markets moving in opposite directions. A sharp unwind in the most crowded corners of technology pulled the Nasdaq lower for four straight sessions, its longest losing streak since February, even as a rotation into industrials, financials, and healthcare carried the Dow to a fresh record high. By Thursday's close the Nasdaq Composite had slipped 0.46% to 25,358.60 and the S&P 500 had finished all but unchanged at 7,357.49, while the Dow added 0.14% to a record 51,920.62 with Caterpillar up 6% and the old-economy names doing the heavy lifting. Money was not leaving the market so much as changing seats.

The pressure built quickly from the start of the week. A global stampede out of semiconductor and AI names sent the chip-heavy indices reeling, with Tuesday's session the most violent as the Nasdaq shed more than 2% and the chip benchmark tumbled close to 8%. The selling looked less like a verdict on fundamentals and more like froth escaping a trade that had run too hot, with the technology sector having outpaced the broad market by a wide margin over the prior three months. Defensive sectors and consumer staples caught the rotation, and for a few days the market's leadership changed hands entirely.

Then earnings reminded everyone why the AI trade had run in the first place. Micron delivered a blockbuster quarter after Wednesday's close, with revenue more than quadrupling from a year ago and management declaring its high-bandwidth memory sold out well into 2027, sending the stock up roughly 16% and dragging the rest of the memory complex higher. Yet the rebound stalled at the Nasdaq's door, where Apple slid about 6% after announcing price increases across its MacBook and iPad lineup, a reminder that even the strongest secular story cannot lift every boat at once. The week closed with the bulls and the rotation in an uneasy truce.

Corporate Earnings

A varied slate cutting across logistics, cruising, memory chips, payroll services, casual dining, and spices, offering a broad read on the health of corporate America.

• FedEx (FDX) — Beat estimates. Revenue of $25,007M beat the $24,026M estimate; EPS of $6.31 beat the $5.95 estimate. Freight demand firm; cost discipline solid.
• Carnival (CCL) — Mixed results. Revenue of $6,663M came in just shy of the $6,694M estimate; EPS of $0.41 beat the $0.34 estimate on record bookings and onboard spending.
• Micron Technology (MU) — Beat estimates. Revenue of $41,456M crushed the $35,820M estimate; EPS of $25.11 crushed the $20.71 estimate. HBM sold out into 2027; record margins.
• Paychex (PAYX) — Mixed results. Revenue of $1,606M in line with consensus; EPS of $1.32 edged past the $1.31 estimate. Small business employment resilient.
• Darden Restaurants (DRI) — Mixed results. Revenue of $3,719M just below the $3,729M estimate; EPS of $3.66 beat the $3.64 estimate. Softer traffic and heavier marketing spend.
• McCormick & Company (MKC) — Beat estimates. Revenue of $1,937M beat the $1,913M estimate; EPS of $0.80 beat the $0.70 estimate. Firm pricing across consumer and flavour solutions.

Economic Indicators

The week's marquee release was the Fed's preferred inflation gauge, and it confirmed that price pressures remain stubbornly elevated even as the consumer keeps spending.

• PCE Inflation — The May personal consumption expenditures price index rose 0.4% on the month, lifting the annual rate to 4.1%, a three-year high driven by energy costs. Core PCE rose 0.3% monthly and 3.4% year-on-year, both above the Fed's 2% target and a reminder that the inflation fight is far from won even as the headline energy impulse begins to ease.
• Personal Spending and Income — The consumer refused to flinch. Personal spending jumped 0.7% in May, ahead of forecasts, and personal income matched that pace, a combination that points to households still willing and able to spend even as prices bite.
• Labour Market — The labour market stayed firm. Weekly jobless claims fell by 12,000 to 215,000, comfortably below expectations, underscoring that employers remain reluctant to let workers go even as hiring cools at the margin.
• Mortgage Rates — Borrowing costs held near a one-month low, with the 30-year fixed mortgage rate hovering around 6.45% as the 10-year Treasury yield eased toward 4.40%, offering buyers a modest reprieve in an otherwise stretched housing market.

Bonds and Monetary Policy

Treasuries quietly rallied through the equity turbulence. The 10-year yield drifted down to around 4.40% by Thursday, easing as the technology selloff stirred some demand for safety and as tumbling oil prices took the edge off the inflation narrative. The policy-sensitive two-year note held near 4.20%, and the modest decline in yields gave a small lift to rate-sensitive corners of the market.

The Fed's target range remains 3.50%–3.75% in the wake of Chair Warsh's hawkish debut, and the May PCE data did nothing to soften that stance. With headline PCE running above 4% and the committee having already signalled a likely hike before year end, markets continued to price the next move as an increase rather than a cut. The dollar reflected that divergence, holding near a one-year high as U.S. yields fell less than those of global peers.

Policy and Sentiment

• Iran and Oil — The peace dividend kept paying out. With the agreement to reopen the Strait of Hormuz holding and the waterway remaining open, oil prices extended their slide to fresh post-agreement lows, a powerful disinflationary force that quietly supported sentiment beneath the tech turbulence. Trump claimed Iran had agreed to renewed nuclear inspections, though Iranian officials disputed the timing and scope.
• Dollar and Yen — Currency markets carried an undercurrent of stress. The dollar firmed to a one-year high on the back of the hawkish Fed, pushing the euro toward a 13-month low and driving the yen close to a 40-year low, a level that kept Japanese officials on alert for possible intervention to steady the currency.
• SpaceX — The newly listed SpaceX stayed in the spotlight, with its shares easing for a third straight session after a large debt offering met a cool reception in the bond market, a reminder that even the most celebrated new issues must answer to the cost of capital.

International Markets

Asia — Nikkei 225: 72,366.34 (▲ 4.61%). Asia delivered the week's most dramatic swings. After a brutal start that saw memory names tumble and South Korea trip its market stabilisation circuit breakers, the region roared back on Thursday once Micron and Qualcomm reignited the AI trade. Japan's Nikkei 225 surged 4.61% to 72,366.34 and South Korea's Kospi jumped more than 5%, with chip suppliers leading the charge.

Europe — STOXX 50: 6,272.25 (▲ 0.93%). European equities ended the week on a firmer footing. The Euro STOXX 50 rose 0.93% to 6,272.25 and the FTSE 100 added 0.65% to 10,529.89, supported by the memory chip rebound and by the relief of cheaper energy, even as a strong dollar and a softening growth outlook tempered the enthusiasm.

Commodities. Commodities reflected the new calm. Brent settled around $74.19 and WTI near $70.79, both at their lowest since before the conflict, while gold slipped to $4,009.07, hovering just above the psychologically important $4,000 mark as a stronger dollar and the retreat of geopolitical risk sapped demand for the metal.

Commodities and Currencies

• Gold (Spot): $4,009.07 (▼ 0.45% daily)
• Brent Crude Oil: $74.19 (▼ 1.42% daily)
• WTI Crude Oil: $70.79 (▼ 1.58% daily)
• EUR/USD: 1.1375 (▲ 0.04% daily)
• GBP/USD: 1.3199 (▲ 0.05% daily)

Volatility and Week Ahead

CBOE Volatility Index (VIX): 18.89 — up 1.40%; spiked toward 20 during Tuesday's tech rout (long-run average ~20).

The focus turns to the labour market, with the June payrolls report due on Thursday and a key test of the resilience shown by recent employment data. Consumer Confidence on Tuesday and the Chicago PMI will offer a read on the macro mood, while ISM Manufacturing, ADP employment, construction spending, factory orders, and the official employment report will frame the June economic picture. Investors will also weigh whether the rotation from technology into value has further to run and whether Micron's blockbuster results can provide a more durable floor for the AI trade. With the Fed leaning toward a hike and headline PCE above 4%, the second half of the year is shaping up to be a more demanding test of the market's nerve.

Key releases:

• Mon 29 Jun — Japan: Unemployment Rate (May); Industrial Production (May)
• Tue 30 Jun — U.S.: S&P/Case-Shiller Home Price Index (Apr.); Chicago PMI (Jun.); Consumer Confidence (Jun.); Canada: GDP (Apr.); Japan: Tankan Survey (Q2); U.K.: GDP (Q1); Current Account (Q1)
• Wed 1 Jul — U.S.: ADP Employment Report (Jun.); ISM Manufacturing Index (Jun.); Construction Spending (May); Domestic Vehicle Sales (Jun.); U.K.: Nationwide House Prices (Jun.); Eurozone: CPI (Jun.)
• Thu 2 Jul — U.S.: Employment Report (Jun.) — payrolls and unemployment rate; Factory Orders (May); Durable Goods Orders (May); Eurozone: Unemployment Rate (May)
• Fri 3 Jul — No major scheduled releases.

For informational purposes only. Not investment advice. Data as of Jun 26, 2026. Consult primary sources before making investment decisions.

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