Morning Wrap: ASX 200 to edge higher, S&P 500 and Nasdaq lower as Apple and Microsoft hike prices

In a nutshell:

• Wall Street finished mixed but all gave back early gains, Dow (+0.14%) just shy of a fresh record close, S&P 500 flat and the Nasdaq down for a fourth straight day

• Micron soared 15.7% on a blowout result and a record US$50bn revenue guide, while Apple and Microsoft tumbled on hardware price hikes, splitting the chip and software trade

• Hot May PCE at 4.1% edged Fed rate hike bets higher, while oil bounced after Iran hit a cargo ship on UN-backed route in Strait of Hormuz

Let's dive in.

• Major US benchmarks mixed but all faded early gains to close relatively flat

• S&P 500 (-0.01%) faded early gains of 0.83% and Dow (+0.14%) rallied as much as 1.56% in early trade

• Breadth was solid, with the Equal-weight S&P 500 (+0.65%) outperforming the cap-weighted index by 66 bps 

• Money rotated out of AI-software megacaps into chip and infrastructure names, with Apple leading the Nasdaq lower while healthcare, financials and industrials lifted the Dow and Caterpillar jumped about 6% 

• A rather busy session, with renewed support for AI-capex related plays, but renewed drag on Mag-7 amid memory input cost pressures (now also a potential driver of third wave of inflation)

• Market gains continue to broaden, 

• Micron and Qualcomm upbeat forecasts reignite $400bn AI chip stock rally (BBG)

• Micron briefly overtakes Meta and Tesla in market value after massive earnings beat (RT)

• Allianz says SpaceX $25bn bond sale shortly after IPO a clear sign markets entering bubble territory (FT)

• US investment-grade bond issuance hits a record $175bn in June, fueled by AI-spending-related borrowing demand (BBG)

• Goldman Sachs cut its year-end gold target to US$4,900 from US$5,400, while Deutsche Bank and Citigroup also trimmed forecasts citing monetary-tightening risk (TK) 

• Micron Q3 FY26 revenue jumped 346% to US$41.46bn, ~18% above ests, non-GAAP EPS US$25.11 beat US$20.30 ests, Q4 revenue was guided to a record US$50bn, shares up 15.7% (CNBC) 

• Apple slid 6% after raising prices on MacBook and iPad, citing higher memory costs tied to the AI-driven chip squeeze (CNBC) 

• Microsoft fell 3.4% after flagging price increases on Xbox consoles, joining Apple in passing rising hardware costs to consumers (TV)

• Trip.com tumbled 12.5% after first-quarter earnings missed and it issued soft second-quarter revenue guidance below estimates (CNBC) 

• Meta racing to replace human moderation with generative AI amid broader cost-cutting to offset AI spending (FT)

• Amazon to invest an additional $13bn in India by 2030 to expand AI and cloud infrastructure (RT)

• All 32 big US banks passed the Fed stress test, JPMorgan lifted its dividend 10% to US$1.65 and added a US$50bn buyback, Goldman raised 11% and Morgan Stanley 15% (BBG) 

• IGRC carries out attack on a Singapore-flagged cargo ship in the Strait of Hormuz (WP)

• Iran warns that any vessel navigating outside Tehran's designated routes in Hormuz run risk of being attacked (EN)

• Persian Gulf Crude exports rebound to 75% of pre-war levels, 13m barrels of Crude left in the region (BBG)

• IMF says energy prices are falling on the recent US-Iran peace agreement, though time is needed for full normalisation (RT)

• Oil back to pre-war levels as Gulf crude exports point to near-term oversupply in some markets (BBG)

• Trump warns Iran against imposing Hormuz transit fees, says doing so will imperil agreement (BBG)

• Insurers cut war premiums for Strait of Hormuz ships, halving hull war coverage as US-Iran ceasefire holds (FT)

• EU approves US trade deal ahead of deadline, will erase levies on US industrial and some agriculture goods (BBG)

• US and India trade chiefs conclude talks with no clarity over trade agreement (BBG)

• Markets now price a ~50% chance of a 25 bp Fed hike in September after the hot PCE print, with Deutsche Bank expecting two hikes this year in September and December (YF) 

• BOJ board member Tamura urges more immediate lifting of policy rate closer to neutral (BBG)

• US May core PCE up 0.3% month-on-month, in-line with ests, annualised core up 3.4% vs. 3.3% ets, now highest since Oct-23 (BBG)

• Data-center boom sparks third inflation wave as memory chip demand lifts prices (WSJ)

• South Korea's AI chip boom fuels apartment buying in Seoul and the semiconductor belt (NK)

• Australian employment and household spending rebounds, signaling degree of economic resilience (RT)

• 4DMedical receives TGA approval for CTVQ in Australia (4DX)

• Ioneer receives conditional award from US Army for long-term land lease on Tooele Army Depot for purpose of establishing critical mineral processing facility (INR)

• Qualitas upgrades Australia long-term funds management EBITDA margin target to greater than 60% vs. prior guidance of greater than 50% (QAL)

• St George Mining holder Hancock Prospecting lifts stake to 9.7% from 6.2% (SGQ)

• Commodities mixed: A very lacklustre bounce for most commodities, with copper up 1.2% (still down 4.7% in the last three sessions) and gold up 0.8% (down 7% in the last six sessions). This drove the VanEck Gold Miners and Global X Copper Miner ETFs up 1.4% and 1.0% respectively. Meanwhile, Rare Earth/Strategic Metals ETF fell 1.6% overnight, with notable weakness from lithium names like Albemarle (-4.5%) and Ganfeng (-4.5%). Chinese lithium carbonate futures fell 5.5% on Thursday to 150,840 yuan a tonne, now down ~28% from mid-May peaks.

• A broadening market?: Select cyclicals/re-opening pockets of the market continue to catch a bid. The best performing ASX sectors over the past week include Healthcare (+6.5%), Staples (+3.7%) and Discretionary (+3.7%).

Broker data is currently pending. Check out tonight's Evening Wrap for a full list of today's analyst updates.

Stocks trading ex-dividend: 

• Fri 26 Jun: Centuria Capital (CNI) – $0.052 

• Mon 29 Jun: APA Group (APA) – $0.305, Arena REIT (ARF) – $0.048, Aspen Group (APZ) – $0.055, BWP Group (BWP) – $0.098, Centuria Industrial REIT (CIP) – $0.042, Centuria Office REIT (COF) – $0.025, Charter Hall Group (CHC) – $0.258, Charter Hall Long Wale REIT (CLW) – $0.064, Charter Hall Retail REIT (CQR) – $0.064, Charter Hall Social Infrastructure REIT (CQE) – $0.043, Cromwell Property Group (CMW) – $0.007, Dexus (DXS) – $0.177, Dexus Convenience Retail REIT (DXC) – $0.052, Dexus Industria REIT (DXI) – $0.042, Digico Infrastructure REIT (DGT) – $0.06, DPM Metals (DPM) – $0.041, Garda Property Group (GDF) – $0.022, GDI Property Group (GDI) – $0.025, Gemlife Communities Group (GLF) – $0.011, Goodman Group (GMG) – $0.15, GPT Group (GPT) – $0.122, Growthpoint Properties Australia (GOZ) – $0.092, Homeco Daily Needs REIT (HDN) – $0.021, Mirvac Group (MGR) – $0.048, Reef Casino Trust (RCT) – $0.068, Region Group (RGN) – $0.072, Rural Funds Group (RFF) – $0.029, Stockland (SGP) – $0.162, Waypoint REIT (WPR) – $0.043 

• Tue 30 Jun: Abacus Group (ABG) – $0.043, Abacus Storage King (ASK) – $0.031, Lowell Resources Fund (LRT) – $0.15, Ophir High Conviction Fund (OPH) – $0.352  

• Wed 1 Jul: Clime Capital (CAM) – $0.014, Graincorp (GNC) – $0.14

Other ASX corporate actions today:       

• Dividends paid: GQG Partners (GQG), Steamships Trading Co (SST), Westpac Bank (WBC)

• Earnings: Ricegrowers (SGLLV)

• IPOs: None

• AGMs: None

Economic calendar (AEST):

No major economic announcements.