The week closed with the Strait of Hormuz still bleeding headlines and crude already down nine percent. Sunday, Washington and Tehran said they were standing down and heading to Doha. Whether that holds is anyone's guess, but for one trading day, at least, the market gets to price the calmer outcome.
And it does so with a Friday tape that was already trying to tell us where the rotation wants to go: out of memory, back into software, with healthcare quietly running the leaderboard.
The Rundown
- A late-weekend ceasefire and a planned Doha summit between the US and Iran reset the energy and risk premium going into Monday's open.
- Software names led the bounce on Friday after a brutal stretch driven by AI-disruption fears, while memory chips kept taking punishment.
- Healthcare staged a coordinated rally on the back of a high-profile biotech strategy day.
- The PCE print landed in line, consumer sentiment rebounded, and the Fed-hike narrative kept softening into the close.
A Soft Friday Inside a Hard Week
Wall Street finished Friday close to flat, but the week was no friend to anyone overweight tech.
The S&P 500 (SPX | ???0.10%) closed at 7,354.02, leaving a 1.8% weekly hole. The Nasdaq (COMPX | ???0.24%) gave back a little more in the final session, ending at 25,297.62 and locking in a weekly loss north of 4%. The Dow Jones (DJI | ???0.09%) finished at 51,876.11, fractionally down on the day, fractionally up on the week. That dispersion tells you most of what you need to know about June so far: the index averages have been a poor proxy for what's happening underneath.
The Nasdaq's four-percent week is the headline I'd focus on. It captures both the AI-capex re-rating debate that Bank of America put back on the table this week and the simple mechanical pressure of crowded positioning unwinding into month-end.
Software Picks Itself Off the Floor
After being treated as collateral damage in the AI-disruption discussion for the better part of two weeks, software names finally caught a bid.
MICROSOFT CORP (MSFT | ???5.71%) and PALANTIR TECHNOLOGIES INC-A (PLTR | ???5.28%) led the bounce-back move, and the rest of the complex came along; SALESFORCE INC (CRM | ???5.45%), DATADOG INC - CLASS A (DDOG | ???8.52%) and HUBSPOT INC (HUBS | ???8.92%) all rallied in sympathy. Microsoft slipped in a fresh Xbox price hike on the same day, which barely registered against the tape.
The more interesting wrinkle came from Michael Burry's latest portfolio reshuffle. Burry's name pulls eye-rolls in some corners, but his positioning here is genuinely worth a second look. He's bought long-dated Microsoft call options expiring at the end of 2028, a clear directional bet that whatever the market is pricing in today around AI disruption gets corrected over a multi-year window.
On Palantir he's done something almost philosophically opposite: he closed half of his short position at $107.15 but kept the remaining puts open. The translation is straightforward, he believes one company gets its multiple back, and the other still has further to fall.
I don't lean on individual investor narratives, but the asymmetry of the trade is what's instructive. Whatever you think of Burry, he's putting structure behind a view that says these two stocks are not in the same trade despite trading like they are.
Mag-7 Splits Down the Middle
Among the megacaps, APPLE INC (AAPL | ???3.14%) recovered a chunk of Thursday's six-percent drubbing on a separate report that surfaced over the weekend: the company is lobbying the White House for permission to buy memory from China's CXMT, currently on the US blacklist for alleged military ties.
Whether the lobbying succeeds is one question; that Apple feels the need to chase Chinese supply in the first place is the more telling signal. Memory tightness is now serious enough that even Cupertino is rattling the cage.
AMAZON.COM INC (AMZN | ???2.50%) drifted higher in line with the broader large-cap tone. ALPHABET INC-CL A (GOOGL | ???1.84%) had a different week, the talent drain story would not go away. Reports of senior AI researchers leaving for Anthropic and OpenAI weighed on the stock all five sessions, and Friday did nothing to change that picture.
The OpenAI ecosystem also had a soft tape. Reports that the company is now eyeing a 2027 IPO instead of this year's window hit its compute partners. ORACLE CORP (ORCL | ???2.58%), which has a $300 billion datacenter buildout running with OpenAI through 2030, gave back ground. COREWEAVE INC-CL A (CRWV | ???2.21%) - whose multi-year arrangement is valued at up to $22 billion — softened in tandem. None of this changes the long-term economics, but it shows how tightly these names now trade as a single thematic basket.
Healthcare Was the Quiet Star
Outside the tech storyline, Friday belonged to healthcare. MODERNA INC (MRNA | ???12.59%) led on its annual Science Day, where management outlined a long-term roadmap that extends meaningfully beyond the vaccines franchise, mRNA-based cancer therapies and rare-disease programs are now the strategic pillars they want investors anchored on. The market liked it.
The rally rippled across the rest of the group. VEEVA SYSTEMS INC-CLASS A (VEEV | ???8.40%), REGENERON PHARMACEUTICALS (REGN | ???2.06%) and INCYTE CORP (INCY | ???5.78%) all moved sharply higher. It's worth noting that this is the kind of session you only get when sector rotation is genuinely repositioning, not when it's reacting to a single name. The breadth here is the signal.
Two more individual movers worth a flag: CROCS INC (CROX | ???7.47%) caught a Piper Sandler upgrade to Buy from Hold, with the firm leaning on a sub-eight forward P/E as the cheapest-in-class argument. And ROCKET LAB CORP (RKLB | ???4.77%) won a NASA assignment to handle launches for two upcoming missions.
Memory Gets the Other Side of the Trade
If software was Friday's relief, memory was its hangover. MICRON TECHNOLOGY INC (MU | ???6.69%) gave back a chunk of Thursday's nearly 16% post-earnings move. The pullback wasn't fundamental, it was profit-taking on a name that just printed a once-in-a-cycle guide.
The pain elsewhere in the group was harder to read positively: SANDISK CORP (SNDK | ???10.46%), SEAGATE TECHNOLOGY HOLDINGS (STX | ???12.24%) and MICROCHIP TECHNOLOGY INC (MCHP | ???6.58%) all took sharp losses.
This is the trade we've been watching all week, the same component tightness that's driving Apple to lobby for sanctioned Chinese supply is what's pulled forward multi-quarter expectations across memory. When expectations get pulled forward at this pace, you eventually get the snap-back. Friday was part of that snap-back, not the start of a trend reversal.
The other big single-name move on the bear side was ON SEMICONDUCTOR (ON | ???23.66%), which announced an all-stock acquisition of Synaptics worth roughly $7 billion, the largest deal in its history. Management framed it as a $30 billion expansion of the total addressable market. The street wasn't convinced; SYNAPTICS INC (SYNA | ???3.68%) also drifted lower despite being the target. A near-24% drop for an acquirer is a clear vote against deal economics, dilution, or both.
Macro Backdrop: PCE In Line, Sentiment Up, Oil Down
The PCE inflation print on Thursday came in roughly where consensus expected, which more or less closes the door on a near-term hike. Fed funds futures continued to drift toward the view that there may be no further moves this year at all, even though Fed governors keep telling anyone who'll listen that they're not done worrying about inflation. Neel Kashkari pushed back this week, saying he still expects one hike, with the Middle East risk premium specifically called out as his reason not to declare victory.
Michigan consumer sentiment came in sharply better, reversing what had been a historic low in May. The proximate cause was gasoline, Brent crude dropped roughly 10% on the week, and West Texas Intermediate closed Friday at $69.23, down 3.7% on the day and 8.7% on the week. The euro firmed to 1.1390 against the dollar.
This is the part of the setup that turns most interesting heading into Monday. Crude was already pricing in the possibility of Hormuz normalizing. The Sunday ceasefire announcement firms that up.
If shipping volumes start climbing back toward the pre-conflict baseline - currently running at roughly 30% of normal - there's still incremental downside in oil even from these already-deflated levels.
What Doha Means for the Tape
The agreement to stand down and meet in Doha is the kind of headline that gets sold as resolution but in practice is just the next chapter. The proximate questions that triggered the latest escalation - Iran's intent to charge "compulsory insurance" for transits through the Strait, the disputed shipping corridor along the Omani coast - haven't been settled. They've been deferred.
Markets will price the deferment as a positive for now, and they should. But anyone modelling a clean glide back to pre-war oil prices is still going to need a friction term in the equation.
For equities, the cleaner takeaway is sectoral. The energy complex was being asked to carry a geopolitical premium that's now smaller. Airlines, industrials with high diesel exposure, and consumer names sensitive to gasoline are the cleanest beneficiaries. The defense names - which have been steady performers through this cycle - get a slightly tougher tape.
Bottom Line
Friday gave the first hints that the rotation under the surface is moving from "memory and capex everything" to something more discriminating.
Software bouncing, healthcare leading, and memory taking profit-taking pressure all point to a market that's done blindly chasing the single biggest theme and is starting to think about what the next leg looks like.
The Hormuz ceasefire, if it sticks, adds a tailwind by removing a specific geopolitical drag from the energy complex and the broader risk premium. Whether the de-escalation actually holds past Doha is the open question. T
he cleaner question for portfolios: is your tech book diversified enough that you're not just long the memory story dressed up as an AI thesis? After this week, I'd be asking that one more carefully.
ChartMill Market Desk - Kristoff
With regard to the stocks discussed in the article above; the author owns individual shares in Microsoft.
This daily update is prepared by ChartMill for informational purposes only and does not constitute investment advice. Always do your own due diligence before making investment decisions.
Read full article here »
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Hormuz Goes Quiet, Software Wakes Up, and Burry Picks a Side
The week closed with the Strait of Hormuz still bleeding headlines and crude already down nine percent. Sunday, Washington and Tehran said they were standing down and heading to Doha. Whether that holds is anyone's guess, but for one trading day, at least, the market gets to price the calmer outcome.
And it does so with a Friday tape that was already trying to tell us where the rotation wants to go: out of memory, back into software, with healthcare quietly running the leaderboard.
The Rundown
A Soft Friday Inside a Hard Week
Wall Street finished Friday close to flat, but the week was no friend to anyone overweight tech.
The S&P 500 (SPX | ???0.10%) closed at 7,354.02, leaving a 1.8% weekly hole. The Nasdaq (COMPX | ???0.24%) gave back a little more in the final session, ending at 25,297.62 and locking in a weekly loss north of 4%. The Dow Jones (DJI | ???0.09%) finished at 51,876.11, fractionally down on the day, fractionally up on the week. That dispersion tells you most of what you need to know about June so far: the index averages have been a poor proxy for what's happening underneath.
The Nasdaq's four-percent week is the headline I'd focus on. It captures both the AI-capex re-rating debate that Bank of America put back on the table this week and the simple mechanical pressure of crowded positioning unwinding into month-end.
Software Picks Itself Off the Floor
After being treated as collateral damage in the AI-disruption discussion for the better part of two weeks, software names finally caught a bid.
MICROSOFT CORP (MSFT | ???5.71%) and PALANTIR TECHNOLOGIES INC-A (PLTR | ???5.28%) led the bounce-back move, and the rest of the complex came along; SALESFORCE INC (CRM | ???5.45%), DATADOG INC - CLASS A (DDOG | ???8.52%) and HUBSPOT INC (HUBS | ???8.92%) all rallied in sympathy. Microsoft slipped in a fresh Xbox price hike on the same day, which barely registered against the tape.
The more interesting wrinkle came from Michael Burry's latest portfolio reshuffle. Burry's name pulls eye-rolls in some corners, but his positioning here is genuinely worth a second look. He's bought long-dated Microsoft call options expiring at the end of 2028, a clear directional bet that whatever the market is pricing in today around AI disruption gets corrected over a multi-year window.
On Palantir he's done something almost philosophically opposite: he closed half of his short position at $107.15 but kept the remaining puts open. The translation is straightforward, he believes one company gets its multiple back, and the other still has further to fall.
I don't lean on individual investor narratives, but the asymmetry of the trade is what's instructive. Whatever you think of Burry, he's putting structure behind a view that says these two stocks are not in the same trade despite trading like they are.
Mag-7 Splits Down the Middle
Among the megacaps, APPLE INC (AAPL | ???3.14%) recovered a chunk of Thursday's six-percent drubbing on a separate report that surfaced over the weekend: the company is lobbying the White House for permission to buy memory from China's CXMT, currently on the US blacklist for alleged military ties.
Whether the lobbying succeeds is one question; that Apple feels the need to chase Chinese supply in the first place is the more telling signal. Memory tightness is now serious enough that even Cupertino is rattling the cage.
AMAZON.COM INC (AMZN | ???2.50%) drifted higher in line with the broader large-cap tone. ALPHABET INC-CL A (GOOGL | ???1.84%) had a different week, the talent drain story would not go away. Reports of senior AI researchers leaving for Anthropic and OpenAI weighed on the stock all five sessions, and Friday did nothing to change that picture.
The OpenAI ecosystem also had a soft tape. Reports that the company is now eyeing a 2027 IPO instead of this year's window hit its compute partners. ORACLE CORP (ORCL | ???2.58%), which has a $300 billion datacenter buildout running with OpenAI through 2030, gave back ground. COREWEAVE INC-CL A (CRWV | ???2.21%) - whose multi-year arrangement is valued at up to $22 billion — softened in tandem. None of this changes the long-term economics, but it shows how tightly these names now trade as a single thematic basket.
Healthcare Was the Quiet Star
Outside the tech storyline, Friday belonged to healthcare. MODERNA INC (MRNA | ???12.59%) led on its annual Science Day, where management outlined a long-term roadmap that extends meaningfully beyond the vaccines franchise, mRNA-based cancer therapies and rare-disease programs are now the strategic pillars they want investors anchored on. The market liked it.
The rally rippled across the rest of the group. VEEVA SYSTEMS INC-CLASS A (VEEV | ???8.40%), REGENERON PHARMACEUTICALS (REGN | ???2.06%) and INCYTE CORP (INCY | ???5.78%) all moved sharply higher. It's worth noting that this is the kind of session you only get when sector rotation is genuinely repositioning, not when it's reacting to a single name. The breadth here is the signal.
Two more individual movers worth a flag: CROCS INC (CROX | ???7.47%) caught a Piper Sandler upgrade to Buy from Hold, with the firm leaning on a sub-eight forward P/E as the cheapest-in-class argument. And ROCKET LAB CORP (RKLB | ???4.77%) won a NASA assignment to handle launches for two upcoming missions.
Memory Gets the Other Side of the Trade
If software was Friday's relief, memory was its hangover. MICRON TECHNOLOGY INC (MU | ???6.69%) gave back a chunk of Thursday's nearly 16% post-earnings move. The pullback wasn't fundamental, it was profit-taking on a name that just printed a once-in-a-cycle guide.
The pain elsewhere in the group was harder to read positively: SANDISK CORP (SNDK | ???10.46%), SEAGATE TECHNOLOGY HOLDINGS (STX | ???12.24%) and MICROCHIP TECHNOLOGY INC (MCHP | ???6.58%) all took sharp losses.
This is the trade we've been watching all week, the same component tightness that's driving Apple to lobby for sanctioned Chinese supply is what's pulled forward multi-quarter expectations across memory. When expectations get pulled forward at this pace, you eventually get the snap-back. Friday was part of that snap-back, not the start of a trend reversal.
The other big single-name move on the bear side was ON SEMICONDUCTOR (ON | ???23.66%), which announced an all-stock acquisition of Synaptics worth roughly $7 billion, the largest deal in its history. Management framed it as a $30 billion expansion of the total addressable market. The street wasn't convinced; SYNAPTICS INC (SYNA | ???3.68%) also drifted lower despite being the target. A near-24% drop for an acquirer is a clear vote against deal economics, dilution, or both.
Macro Backdrop: PCE In Line, Sentiment Up, Oil Down
The PCE inflation print on Thursday came in roughly where consensus expected, which more or less closes the door on a near-term hike. Fed funds futures continued to drift toward the view that there may be no further moves this year at all, even though Fed governors keep telling anyone who'll listen that they're not done worrying about inflation. Neel Kashkari pushed back this week, saying he still expects one hike, with the Middle East risk premium specifically called out as his reason not to declare victory.
Michigan consumer sentiment came in sharply better, reversing what had been a historic low in May. The proximate cause was gasoline, Brent crude dropped roughly 10% on the week, and West Texas Intermediate closed Friday at $69.23, down 3.7% on the day and 8.7% on the week. The euro firmed to 1.1390 against the dollar.
This is the part of the setup that turns most interesting heading into Monday. Crude was already pricing in the possibility of Hormuz normalizing. The Sunday ceasefire announcement firms that up.
If shipping volumes start climbing back toward the pre-conflict baseline - currently running at roughly 30% of normal - there's still incremental downside in oil even from these already-deflated levels.
What Doha Means for the Tape
The agreement to stand down and meet in Doha is the kind of headline that gets sold as resolution but in practice is just the next chapter. The proximate questions that triggered the latest escalation - Iran's intent to charge "compulsory insurance" for transits through the Strait, the disputed shipping corridor along the Omani coast - haven't been settled. They've been deferred.
Markets will price the deferment as a positive for now, and they should. But anyone modelling a clean glide back to pre-war oil prices is still going to need a friction term in the equation.
For equities, the cleaner takeaway is sectoral. The energy complex was being asked to carry a geopolitical premium that's now smaller. Airlines, industrials with high diesel exposure, and consumer names sensitive to gasoline are the cleanest beneficiaries. The defense names - which have been steady performers through this cycle - get a slightly tougher tape.
Bottom Line
Friday gave the first hints that the rotation under the surface is moving from "memory and capex everything" to something more discriminating.
Software bouncing, healthcare leading, and memory taking profit-taking pressure all point to a market that's done blindly chasing the single biggest theme and is starting to think about what the next leg looks like.
The Hormuz ceasefire, if it sticks, adds a tailwind by removing a specific geopolitical drag from the energy complex and the broader risk premium. Whether the de-escalation actually holds past Doha is the open question. T
he cleaner question for portfolios: is your tech book diversified enough that you're not just long the memory story dressed up as an AI thesis? After this week, I'd be asking that one more carefully.
ChartMill Market Desk - Kristoff
With regard to the stocks discussed in the article above; the author owns individual shares in Microsoft.
This daily update is prepared by ChartMill for informational purposes only and does not constitute investment advice. Always do your own due diligence before making investment decisions.
Read full article here »