The Nasdaq 100 had its worst day since the tariff shock of April 2025, falling 4.77%, with chipmakers taking the hardest hit. Micron, Sandisk, Intel and others were hit sharply. Nvidia, the central symbol of the AI trade, lost more than 6%. Across the U.S.-listed chip sector, roughly $1 trillion in market value was erased.

Yet Monday is not shaping up as a simple continuation of the panic. Nvidia, Broadcom and Micron are all rebounding in premarket trading. Marvell Technology is jumping after the announcement that it will be added to the S&P 500, along with Flex. Yet Friday showed that investors are becoming more demanding about AI. How much spending is too much? When will it turn into revenue? Which companies are building durable businesses, and which are simply buying expensive equipment because everyone else is? Broadcom's underwhelming results last week helped sharpen those doubts. 

UBS is making the case that the market should not lose confidence in the broader AI outlook. The bank argues that business fundamentals remain strong and that AI spending is likely to stay elevated as companies continue adopting the technology. Citigroup has gone even further, raising its 2026 year-end target for the S&P 500 above 8,000, citing resilient earnings and AI-led growth.

That optimism may be justified. But it is also running into a much less friendly macro backdrop. The most immediate problem is oil. Renewed fighting between Israel and Iran has pushed crude prices sharply higher, with Brent trading above $97 a barrel and U.S. crude moving above $95. The fragile hopes for a calmer Middle East have faded again after fresh strikes involving Iran, Israel and Lebanon. Today, there is some hope, since Iran announced an end to attacks against Israel - although Netanyahu has yet to respond to this announcement. Donald Trump has indicated that he is counting on a peaceful and swift resolution to the conflict between Tel Aviv and Tehran. 

Friday's stronger-than-expected jobs report already forced investors to rethink the path of interest rates. A month ago, traders saw only a small chance that the Federal Reserve would raise rates this year. Now, markets are pricing in a much higher probability of at least one hike before year-end. Some measures put the chance of a December move around 42%, others suggest the odds of at least one hike this year are closer to 69%.

Goldman Sachs now expects the Fed to hold rates steady through the end of the year and delay cuts until 2027. The Fed meets on June 16 and 17, and while it is expected to hold policy steady, it may sound tougher. Trump is already pressuring Fed Chair Kevin Warsh to cut rates, saying there is no reason to raise them. Wednesday's consumer-price report will therefore matter a great deal. Investors will be watching to see whether higher energy prices are starting to feed into broader inflation. If they are, the Fed's room to be patient gets smaller. If they are not, the market may get permission to breathe again.

In other news, the European Central Bank is expected to raise rates on Thursday, but the decision comes with an uneasy debate. Some policymakers worry inflation still requires a firm response. Others fear repeating the ECB's 2011 mistake, when it tightened into weakness.

Apple's developer conference begins today, and investors will watch closely for signs that the company can make its AI push feel both practical and profitable. Later this week, SpaceX is expected to begin trading on the Nasdaq in what could be the largest IPO ever. The hype will be enormous. So will the temptation to treat the first-day pop as proof of lasting value. Investors should remember that IPOs often sparkle early and disappoint later.

Today's economic highlights:

See the full calendar here.

  • Dollar index: 99.928
  • Gold: $4,325
  • Crude Oil (BRENT): $94.5 (WTI) $91.75
  • United States 10 years: 4.54%
  • BITCOIN: $62,923

In corporate news:

  • Pfizer received expanded FDA approval for Hympavzi to prevent or reduce bleeding episodes in more hemophilia patients, including children aged 6 to 11 and patients aged 12+ with inhibitors.
  • Johnson & Johnson agreed to acquire biotech Firefly Bio for $1 billion in cash to expand its cancer drug pipeline.
  • Devon Energy reported strong early tender results across seven senior note series, with participation ranging from about 66% to 98%.
  • Eli Lilly shares rose after late-stage data showed retatrutide delivered major weight loss and improvements in obesity-related conditions.
  • Blackstone is reportedly preparing a more than $2 billion securitization of private fund stakes to provide liquidity to investors.
  • Samsung Electronics said it discussed next-generation foundry cooperation and future HBM chips with Nvidia CEO Jensen Huang.
  • United Airlines CEO Scott Kirby said a major merger is unlikely after American Airlines rejected an approach, though asset purchases remain possible.
  • Nyxoah aims to raise $95 million via a public offering in the US.
  • Meta is considering a massive fundraising drive to accelerate its investments in AI; the share price plummets.
  • Nvidia has signed agreements with SK Group and other South Korean giants to accelerate the roll-out of AI. Its CEO predicts that the memory shortage will persist for several years.
  • SpaceX has signed a contract to provide computing power to Google.
  • OpenAI plans to transform ChatGPT into a super-app ahead of its IPO, according to the FT.
  • Boehringer Ingelheim and Zealand Pharma report promising results on reducing visceral and hepatic fat in obesity.
  • Eli Lilly claims that its next-generation obesity treatment reduces sleep apnoea.
  • Netflix has appointed Jay Hoag as chairman of the board, succeeding co-founder Reed Hastings.
  • Saudi Aramco is cutting its benchmark crude oil prices for July.

Analyst Recommendations:

  • Crocs, Inc.: Baird upgrades to outperform from neutral and raises the target price from USD 115 to USD 150.
  • Cummins Inc.: UBS upgrades to buy from neutral with a price target raised from USD 565 to USD 850.
  • The Allstate Corporation: Keefe Bruyette & Woods downgrades to market perform from outperform and reduces the target price from USD 266 to USD 242.
  • W.r. Berkley Corporation: Wells Fargo downgrades to underweight from equalweight and reduces the target price from USD 64 to USD 58.
  • Alcoa: Jefferies maintains its buy recommendation and raises the target price from USD 82 to USD 100.
  • Broadcom Inc.: Haitong International Research Ltd maintains its outperform rating and raises the target price from USD 452 to USD 577.50.
  • Fortinet, Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 125 to USD 160.
  • Host Hotels & Resorts, Inc.: Raymond James maintains its outperform rating and raises the target price from USD 22 to USD 27.
  • Humana Inc.: JP Morgan maintains its neutral recommendation and raises the target price from USD 214 to USD 316.
  • Jefferies Financial Group Inc.: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 42 to USD 60.
  • Micron Technology, Inc.: Wells Fargo maintains its overweight recommendation and raises the target price from USD 550 to USD 1220.