Stocks closed mixed yesterday with the Dow, small-cap Russell 2000, and mid-cap S&P 400 finishing in the green. (Small-caps and mid-caps both notched new all-time high closes in the process.) The tech-heavy Nasdaq and S&P 500 ended in the red.

Ironically, after Micron reported blowout earnings the day before and soaring 15.74% yesterday, not to mention other Memory-chip makers Sandisk and Western Digital gaining 21.97% and 4.90% respectively, it was not enough to lift the Nasdaq or the S&P.

Memory-chip stocks have been soaring. The memory-chip shortage is real. It's not temporary. It's structural, driven by AI demand. AI is consuming memory at a rate the world has never seen. And it's expected to last thru 2027.

Soaring memory-chip prices, however, are tough for those consuming them. Apple's stock fell -6.12% yesterday after it was forced to raise prices on its Mac Books, iPads, Apple TV and Apple Vision Pro. Most price increases ranged from $100-$300. But Apple did not raise prices on the iPhone.

They expect to release their latest iPhone in September of this year. It?s expected to be heavily AI-centric. And is being touted as a major upgrade, and one that could bring those who have skipped recent model upgrades to make the switch with this release. I would imagine they are wary of disrupting demand with a price increase ahead of such an important upgrade. We shall see.

In other news, yesterday's Personal Consumption Expenditures (PCE) index showed headline inflation up 0.4% m/m, in line with last month and views for the same. The y/y rate rose to 4.1% vs. last month's 3.8%, but in line with estimates. The core rate (ex-food & energy) came in at 0.3% m/m, even with last month, and the consensus. The y/y rate came in at 3.4%, up a bit from last month's 3.3%, but in line with expectations.

These were modest changes that were widely expected. And given falling crude oil prices, that bodes well for next month's inflation reports. Especially since rising oil prices have been one of the biggest contributors to the recent increase in inflation, and subsequent talk of a possible rate hike later this year if inflation persists.

With oil continuing to fall (yesterday notwithstanding ? although it's down -39.2% from its conflict high made in April, and is only up 6.63% since the war began), the rate cut for 2026 might not happen after all. And could very well move up the timeline to resume rate cuts. Even now, despite the possibility of a rate hike being on the table for 2026, the Fed's Summary of Economic Projections (SEP) is still forecasting cuts to resume in 2027 and 2028.

We also got the third and final estimate for Q1'26 GDP, and it was upgraded to 2.1% from the prior estimate of 1.6% and outlook for the same.

With one more day to go, the major indexes are mixed for the week with the Dow, Russell 2000 and S&P 400 on pace to close up for the week, while the Nasdaq and S&P 500 are currently in the minus column.

But all of the indexes have had a great first half so far (although, some better than others), with the Dow up 8.03%; the S&P 500 up 7.48%; the Nasdaq up 9.11%; the Russell up 21.2% (wow); and the S&P 400 up 15.7% (also wow).

Still one more week to go for the first half (well, half a week). Then it's on to the back half. And I'm expecting even better things for that.

Best,