US futures are reaching new all-time highs after Tuesday’s record-setting rally, with the S&P hitting a new record high despite negative breadth. Wall Street bulls are becoming more vocal, with Goldman raising its S&P 500 target and Barclays strategists suggesting that investors still have room to chase the rally. The memory bubble is still going strong, with the market value of Korea’s SK Hynix surpassing the trillion-dollar mark just one day after Micron did the same. As of 8:00 am, S&P 500 futures are up 0.3%, while Nasdaq 100 contracts are rising 0.4%. Micron shares are up another 5% in premarket trading. Semiconductor stocks are also on the rise, along with cyclicals like Discretionary, Industrials, and Materials.
In other news, Box shares are down 2% after the software company’s first-quarter results met expectations, but with an impact from foreign-exchange issues. Rocket, space, and satellite communications companies are rallying in premarket trading, set to extend recent gains after SpaceX filed for a massive IPO. Semiconductor and chip equipment companies are seeing gains as the sector continues to surge, pushing SK Hynix and Micron Technology’s market capitalizations above $1 trillion. Verra Mobility shares are tumbling 43% after cutting full-year guidance and losing a contract with Avis Budget. Zscaler shares are down 22% after a weak revenue forecast. Samsung Electronics union members have voted in favor of a compensation deal, avoiding a strike that could have disrupted global chip supply. China is reportedly delaying approval of Airbus plane deliveries to signal impatience with European regulators.
ByteDance is planning to increase its capital spending to lead the Chinese AI market and challenge top US players. Software companies and private equity investors are expected to face challenges as debt redemptions increase in the coming years. The AI CapEx theme is driving continued structural growth in the market, with investors advised not to bet against it. The momentum behind the AI trade is strong, with chipmakers expected to capture a significant share of global capital spending. BBVA strategists suggest selling US equity volatility, citing strong forward signals from short vol portfolios. VIX tends to drop in June and July before rising in August and September.
In European markets, stocks are climbing on optimism about a US-Iran peace deal and a pullback in oil prices. Autos are leading gains after a rise in European car sales for the third consecutive month. In Asia, chipmakers are driving demand during the AI boom, with SK Hynix’s market value surpassing $1 trillion. The MSCI Asia Pacific Index is climbing to a new record, with South Korea’s Kospi leading gains.
In the foreign exchange market, the dollar is stable, with the AUD/NZD pair expected to drop the most in a year due to repricing of rate differentials. The RBNZ left interest rates unchanged but signaled a likely rate hike soon. Fed speakers include Cook, Jefferson, and Goolsbee. US economic data includes the weekly ADP employment change, May Richmond Fed manufacturing index, and May Dallas Fed services activity.
Commodities are seeing WTI crude oil futures down almost 4%, with Brent crude futures for July down 3.5% to around $96 a barrel. Gold is tumbling more than 3% as it is used to fund the memory bubble. Today’s economic data includes the weekly ADP employment change, May Richmond Fed manufacturing index, and May Dallas Fed services activity. Fed speakers include Cook, Jefferson, and Goolsbee.