Equities — Rebound Fizzles, Then Micron Saves After-Hours
Wall Street spent most of Wednesday trying to claw back ground from Tuesday’s chip-led carnage — the Nasdaq had dropped over 2% and the Philadelphia Semiconductor Index nearly 8% in that session — but the bounce never really materialised during regular hours. The S&P 500 edged down 0.1% to 7,359.11 on thin conviction, with the Technology sector shedding another 0.6%. The Dow managed a 0.4% gain to 51,850.87, propped up partly by homebuilders (the PHLX Housing Index surged 5.4% after Congress passed an affordable housing bill) and the news that Alphabet will replace Verizon in the index effective June 29.
The real action came after the close. Micron delivered fiscal Q3 revenue of $41.5 billion against estimates of $35.7 billion, with earnings of $25.11 a share versus the $20.49 consensus. Then it guided Q4 revenue to approximately $50 billion — a figure that left the Street’s $43.2 billion estimate looking quaint. The stock surged about 13% in extended trading, and a Nasdaq 100 ETF jumped 1.5%. CEO Sanjay Mehrotra told analysts there was “no line of sight” to when memory supply would catch up with demand, a condition he said would persist beyond calendar 2027. Adjusted gross margin more than doubled to 84.9%.
Elsewhere in the chip complex, South Korea’s KOSPI rallied 3.5% on Wednesday after Samsung Electronics jumped nearly 10% on reports of a potential ¥90 trillion ($58 billion) buyback, and SK Hynix filed for a Nasdaq listing of up to $29.4 billion in ADSs. At the other end of the spectrum, Cerebras plunged 19.5% after issuing disappointing margin guidance in its first report since going public. JPMorgan strategists led by Dubravko Lakos-Bujas raised their year-end S&P 500 target to 7,800, citing solid earnings and the emerging Iran peace deal as key drivers of what they called a “blue sky” scenario.
JPMorgan strategists led by Dubravko Lakos-Bujas boosted their year-end S&P 500 target to 7,800 from the current 7,358 level, highlighting solid earnings and a potential Iran peace deal as key drivers. Separately, JPMorgan and Goldman Sachs both raised their dividends after passing this year’s Fed stress tests.
Middle East — Hormuz Flows “Fully Restored,” Technical Talks Resume Next Week
The most consequential development for global markets continues to come from the Strait of Hormuz. U.S. Energy Secretary Chris Wright told the Reuters Global Energy Forum that 72 ships carrying 20 million barrels of oil had transited the strait in the past 24 hours, “fully restoring pre-conflict flows.” He went further, stating that even if the interim memorandum of understanding between Washington and Tehran collapsed after the 60-day negotiation window, oil would continue to flow. “Iran will not have the ability to close the Strait of Hormuz going forward. That’s a critical thing — that’s their key leverage, and we’re taking that leverage away from them,” Wright said.
Kpler data confirmed 31 verified ship crossings on Tuesday across commercial and energy-linked vessels. West-to-east movements dominated, and Iranian, Omani and IMO routes all remained in use. Several previously stranded supertankers successfully exited the Gulf carrying crude cargoes, and a growing number of Qatar-linked LNG vessels resumed voyages through the waterway. Productive peace talks in Switzerland earlier in the week resulted in Washington granting Iran a temporary sanctions waiver allowing certain oil exports through August.
Secretary of State Marco Rubio, speaking from Kuwait City, confirmed that technical negotiations between U.S. and Iranian representatives would resume in Switzerland next Tuesday, June 30. “They’ve broken up the negotiation into separate work streams on separate topics, and the technical group will return on the 30th next week to continue those talks,” Rubio said. Pakistan’s foreign ministry confirmed the timeline — Islamabad has acted as a chief mediator alongside Oman. President Trump, speaking on Capitol Hill, struck a triumphant tone: “The war is going very well. As you know, we’re winning by a lot. Iran is making very big concessions.”
ING analysts cautioned that while roughly 6–7 million b/d of oil has moved through the strait in recent days, that remains well below pre-war flows of around 20 million b/d. However, with Saudi and UAE pipeline diversions, they estimate flows only need to recover to about 14 million b/d for Persian Gulf supply to return to pre-war levels. “We continue to believe that the oil sell-off is overdone, with the market still tightening,” ING wrote.
Energy, Commodities & FX — War Premium Evaporates
Brent crude settled 4.3% lower at $73.50 a barrel, hitting a session low of $73.33 — its weakest since February 27, the day before the U.S.-Israeli assault on Iran began. WTI dropped 4.4% to $70.02, briefly breaking below the $70 mark for the first time since early March. The effective closure of the Strait of Hormuz had created the biggest supply disruption in history and sent oil prices spiralling higher, but the rapid reopening under the interim peace deal has now erased virtually the entire war premium. Meanwhile, EIA data revealed that total U.S. crude inventories (including the SPR) fell by 15.2 million barrels to 743.3 million — the lowest since October 1984 — as Washington rapidly depleted reserves to cushion global supply.
The commodity rout extended well beyond oil. Gold fell below $4,000/oz for the first time this year and is now down 12% in June — on track for its worst month since 2008. Silver cratered 8% on the day and sits more than 50% below its January peak, down 25% for the month alone. Bitcoin briefly traded below $60,000, shedding roughly 20%. With the end of the month, quarter and first half approaching, the selling reflects aggressive rebalancing, profit-taking and position-squaring across virtually every asset class. Stocks remain the notable holdout — whether they represent a solid base for the next leg up or are simply next in line to correct is the question dominating trading desks.
The U.S. dollar index rose 0.2% to 101.58, its highest since mid-May 2025 and its sixth consecutive day of gains. Safe-haven demand from the tech sell-off and the hawkish Fed posture continue to underpin the greenback, even as falling oil prices trim rate-hike expectations. The euro dropped 0.2% to $1.1358 — its lowest in over a year — while sterling slipped 0.2% to $1.3167. The yen remained pinned near multi-decade lows with USD/JPY at 161.82, well above the 160 intervention threshold, as markets largely shrugged off a BOJ summary showing several policymakers favouring faster rate hikes after last week’s increase to 1.0%. The U.S. 5-year breakeven inflation rate fell to 2.20% — the lowest this year — while one-year eurozone inflation swaps dropped back below the ECB’s 2% target.
The U.S. 2s/10s curve closed at 25 basis points on Wednesday, its flattest since March last year. The flattening accelerated after last week’s hawkish Fed statement and Chair Kevin Warsh’s press conference. Traditionally a signal of slowing growth, but as Interactive Brokers’ José Torres noted, the move is being driven by a “bull-flattening” dynamic as the oil rout quells inflation fears at the long end, while the short end holds firm on expectations that Warsh “is unlikely to be overly impressed by sinking energy costs.”
AI & Corporate — Anthropic Accuses Alibaba, OpenAI Unveils Custom Chip
Anthropic accused Alibaba’s Qwen AI lab of waging an industrial-scale campaign to “illicitly” access its Claude AI model, according to a letter sent to U.S. senators and White House officials. The effort allegedly involved 28.8 million exchanges with Claude between April and June through nearly 25,000 fraudulent accounts, targeting the model’s most prized capabilities in software engineering and agentic reasoning. Anthropic warned that Chinese labs are systematically using a practice called adversarial distillation to replicate frontier U.S. models at a fraction of the cost, and without safety guardrails. Alibaba’s ADRs fell more than 3% to $99.10 on the news.
The political response is building. Senate lawmakers Bill Hagerty and Andy Kim are planning an amendment to must-pass defence legislation that would blacklist or sanction any Chinese firm found to be improperly accessing U.S. AI model output. A related bipartisan House bill is also being considered. Anthropic, OpenAI and Google have already joined forces to share information about distillation attempts. Separately, OpenAI unveiled its first custom AI chip developed in partnership with Broadcom, and two leading AI researchers at Google are planning to leave for Anthropic — adding to a string of high-profile departures from the search giant.
ASX Outlook & Day Ahead
Australian shares are set to open modestly higher after ASX 200 futures reversed earlier losses in line with the late-day Wall Street sentiment shift, gaining 16 points (+0.2%) to 8,810. The key domestic event is May employment data at 11:30am AEST, released alongside ABS quarterly job vacancies and monthly household spending figures. Across the Tasman, a2 Milk declared a $300 million fully franked special dividend after securing Chinese regulatory approval for its Pokeno infant formula registrations, while Tourism Holdings attracted a fresh takeover approach at NZ$3.30–$3.40 per share from a strategic buyer, adding a second bidder alongside the BGH-led consortium.
The ASX should benefit from Micron’s after-hours blowout and the continued compression of oil-driven inflation fears, though May jobs data could inject volatility if the labour market shows unexpected tightening that emboldens the RBA hawks. The AUD remains under pressure with the dollar index at 13-month highs.
- Australia Employment Data — May (11:30am AEST) — The most watched domestic print today. A strong number could reignite expectations of RBA tightening; a soft reading would reinforce the case for an extended hold.
- ABS Job Vacancies & Household Spending (11:30am AEST) — Released alongside employment. Vacancies trending lower would signal cooling demand; spending data feeds directly into the consumption outlook.
- U.S. PCE Inflation — May — The Fed’s preferred inflation gauge. Consensus expects acceleration on both monthly and annual measures, though the oil rout means this reading likely marks peak war-driven inflation.
- U.S. GDP — Q1 Final Estimate — Third and final revision. Unlikely to move markets unless the revision is substantial, but it sets the baseline for H2 growth expectations.
- U.S. Durable Goods — May — Watch for signs of whether the AI capex boom is translating into broader manufacturing orders.
- Fed Speakers: Bowman, Williams, Goolsbee — Vice Chair for Supervision Michelle Bowman, New York Fed President John Williams and Chicago Fed President Austan Goolsbee are all scheduled. Markets will parse their comments for any softening of last week’s hawkish stance in light of collapsing oil prices.
