Stocks closed lower yesterday with all of the major indexes in the red. The Nasdaq got hit the worst, giving up -2.22%, followed by the S&P 500 with -1.44%. Interestingly, the Dow only eked out a small loss of just -0.09%.

Memory-chips sold off yesterday and dragged many other tech and AI-related names along with it. Micron (which reports earnings today after the close) fell -13.18%. Sandisk was down -13.64%. And Western Digital was down -8.45%.

Still big gains for those names and the AI trade. But last couple of days have been rough.

Another solid beat by Micron today, and stellar growth rates (and perhaps more raised guidance?), could send investors scrambling back into those names. There is a memory shortage after all.

Overseas market action didn't help. South Korea's Kospi plunged nearly -10% the day before. And South Korean semiconductor company SK Hynix, which is one of the world's largest memory-chip manufacturers, slid by more than -12%.

For context, the KOSPI is still up roughly 100% YTD, with SK Hynix up more than 300%.

In other news yesterday, the PMI Composite Index came in at 52.2 for June vs. last month's 51.5 and views for 51.2. The Manufacturing Index was at 55.7 vs. last month's 55.1 and estimates for 54.7. And the Services Index was at 51.3 vs. last month's 50.7 and forecast for 51.0.

And the Richmond Fed Manufacturing Index slipped to 4 vs. last month's 13 and outlook for 8.

Today we'll get MBA Mortgage Applications, New Home Sales, the Survey of Business Uncertainty, and the EIA Petroleum Status Report.

Talks continue regarding the U.S.-Iran Memorandum of Understanding (MOU). A 60-day roadmap has been agreed to. And traffic thru the Strait of Hormuz is picking up. In fact, the latest ship count puts it at the highest level since the war began. And that's all good news.

That can also be seen in the price of crude oil. It was down again yesterday, shedding another -1%. It's also down -37.9% from its conflict high made in April. And is only up 9% since the war began.

Falling oil prices also bodes well for easing inflation. Rising energy prices has been one of the biggest contributors to the recent uptick in inflation, and in part, the latest talk of raising rates if inflation persists.

If oil continues to fall, that could/should ease inflation concerns, and potentially scuttle rate hike talk. And in turn, move up the timeline for resuming rate cuts. Even with now, with a rate hike on the table for 2026, the Fed's Summary of Economic Projections (SEP) is still forecasting cuts to resume in 2027 and 2028.

We'll get another look at inflation on Thursday, 6/25, with the Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge.

We'll also get the third and final estimate for Q1'26 GDP on Thursday.

In the meantime, today's earnings by Micron (after the close) will be closely watched. And a good report could send memory-chips right back up. (For context, while yesterday was painful, YTD MU is up 268.5%, SNDK is up 727.2%, and WDC is up 289.4%.)

See you tomorrow,