Panic over, everyone. The latest technology-stock slump looks more like a brief bout of volatility than a bubble popping. But that doesn't mean investors can relax entirely as two crucial tests loom.
It's not clear what triggered the two-day tech rout to start the week. Some mixture of SpaceX spending fears, Korean investors getting nervous about their huge gains in memory chips, and the threat of cheap Chinese AI seems to be as close an explanation as any. But the truth is, when the 20 hottest S&P 500 stocks have all more than doubled in value in less than six months, it's no surprise to see some pullbacks.
It's the concentration of gains among semiconductor and AI-infrastructure-related stocks that is making the S&P 500 vulnerable. In fact, the benchmark index fell more than 1% despite the majority of its component companies actually ending the day higher on Tuesday. Rather than a wholesale flight, there were signs of rotation toward the safety of consumer staples and healthcare, which should be healthy for market breadth.
Still, more fundamental challenges loom for the tech trade. Micron Technology earnings after the market close have suddenly become a crucial bellwether. A knee-jerk reaction to an underwhelming report could trigger a substantial slide. Just look at the reaction to AI chip company Cerebras Systems' earnings on Tuesday, with the stock plunging early Wednesday.
An even bigger test is what happens if the Federal Reserve starts hiking interest rates -- a move that could bring back bad memories of 1999 and the popping of the dot-com bubble. That will bring a sharp focus to Thursday's release of May's personal consumption expenditures price index, the Fed's favored measure of inflation.
Markets have found their footing for now, but Micron earnings and inflation data still have the potential to reignite investors' lurking fears.
-- Adam Clark
Get more of the journalism you love. Choose Barron's as a preferred source in Google.
Alphabet to Replace Verizon in Dow Reshuffle
The Dow Jones Industrial Average is about to become even more tech-heavy. Google parent Alphabet is joining the blue-chip index, with wireless carrier Verizon Communications set to be booted out.
-- S&P Dow Jones Indices said in a press release that Verizon's low stock
price meant it had an "immaterial impact" on the Dow Industrials, which
is price-weighted. Alphabet has a stock price of around $350, against
about $47 for Verizon.
-- Adding Alphabet will "broaden and strengthen" the Dow Industrials'
exposure to "dynamic areas of the U.S. economy," S&P Dow Jones Indices
said. The stock has jumped 103% over the past year, powered higher by
soaring revenue for Google Cloud and the integration of AI into the
company's search-engine business.
-- There also will be a change in the S&P 500 as Honeywell Aerospace, a
spinoff from Honeywell International, will join the index, replacing
Conagra Brands. Honeywell International will remain in the Dow Jones
Industrial Average after the Honeywell Aerospace spinoff.
-- The Alphabet addition is the first change to the Dow Jones Industrial
Average since Nvidia and Sherwin-Williams were added to the index in
November 2024, replacing chemical company Dow and chip manufacturer
Intel.
What's Next: The reshuffles are set to take place before trading opens on June 29. It means that five members of the Magnificent Seven megacap group will be part of the Dow Industrials -- Alphabet, Microsoft, Apple, Amazon.com, and Nvidia.
-- Andrew Bary and George Glover
FedEx Boosted by Higher Shipping Rates, Volumes
FedEx said fourth-quarter results got a boost from higher domestic and international shipping rates and volume plus its ongoing cost cuts after spinning off its freight business into a separate company this month. CEO Raj Subramaniam said FedEx's growth strategy is working, positioned to further optimize its network.
-- The company reported adjusted profit of $6.31 a share and a 12.5% gain in
revenue to $25 billion, both beating Wall Street's forecasts. Reported
profit of $1.6 billion reflects the costs associated with the spinoff and
other matters.
-- FedEx is moving to reporting earnings on a calendar year basis, so
comparisons with past quarters and years are difficult. For calendar year
2026, it expects revenue to rise 11% and it expects adjusted earnings of
$16.90 to $18.10 a share.
-- The lower earnings per share outlook for the calendar year ending this
December versus the fiscal year ending last month could explain in part
why the stock fell 6% in after-hours trading on Tuesday. Historical
comparisons are skewed by the spinoff of the freight business on June 1.
-- When it last reported earnings in March, FedEx said that $1.991 billion
of its $24 billion in quarterly revenue came from those
less-than-truckload $(LTL)$ operations. LTL shippers usually serve
industrial customers that don't need a full truck to send items short
distances.
What's Next: As part of the spinoff, shareholders got one share of FedEx freight for every two shares they already held of FedEx. That effectively lowered Fedex's stock price, which was around $411 at the end of May, by approximately $80 a share. The freight business reports earnings on Thursday.
-- Anita Hamilton
Cerebras Systems Beats Expectations in Post-IPO Earnings
In its first earnings report since its initial public offering, the chip maker Cerebras Systems beat revenue expectations and narrowed its loss. But the outlook for its annual adjusted gross margin shows that the company expects to see reduced profitability over the rest of the year as it ramps up its service contract with OpenAI.
-- Revenue for the quarter reached $193 million, up 94% from a year ago. The
company's adjusted operating loss was a smaller-than-expected $3.5
million, versus a $44 million loss last year. For the second quarter it
sees revenue rising 88% to $194 million.
-- The company makes a unique AI chip. Though just going public in May, it
already has 11 analysts who have initiated coverage, according to FactSet,
with an average price target of $294 and a Buy rating. It isn't expected
to show a profit until its $20 billion multiyear cloud contract with
OpenAI accelerates next year.
-- OpenAI uses Cerebras' cloud to host one of its software coding models,
Codex-Spark. This is typical of the medium-sized AI models seen running
on Cerebras hardware, but the company claims they will soon be able to
run much larger models, like OpenAI's ChatGPT 5.5.
-- The chip maker also has a binding term sheet with Amazon Web Services,
which would be the first major cloud to host Cerebras' AI chips. At the
end of 2025, Cerebras' backlog was $24.6 billion, mostly from the OpenAI
deal.
What's Next: Cerebras has said it would recognize $3.7 billion of the backlog as revenue in 2026 and 2027. Investors are hoping that the stock gets caught up in the same tailwind that has supercharged stocks of Nvidia and Micron Technology, which reports earnings today.
-- Adam Levine
Walmart's Nuclear Deal Shows Demand Beyond AI Data Centers
Walmart's long-term contract to buy nuclear power from a Constellation Energy facility in Illinois for its stores and a high-tech warehouse in the area is a promising sign that the nuclear industry's future is supported by more than just the AI data center boom.
-- The retailing giant will buy 176 megawatts of power from the plant over a
15-year period, or enough to power 150,000 homes. It allows Constellation
to expand the capacity at that plant by 30 megawatts, a process called an
uprate, which can involve replacing older equipment and improving
efficiency.
-- Financial terms weren't disclosed, but these types of deals tend to go
for premium prices because they allow the buyer to lock in their costs
over a long period. Walmart has pledged to eliminate net carbon emissions
from its U.S. operations by 2040. Nuclear generates electricity without
carbon emissions.
-- The deal isn't large enough to significantly boost Constellation's growth
trajectory, given that Constellation has 55 gigawatts of generating
capacity and the Walmart deal represents less than 0.5% of that total.
-- The Trump administration is backing a nuclear revival, announcing $17.5
billion in low cost loans from the Energy Department for utilities to
finance equipment orders for the Westinghouse AP1000 large-scale nuclear
reactor.
What's Next: Energy Secretary Chris Wright said the loans will play a role in reviving the supply chain needed to build large-scale commercial reactors and accelerate the timeline of building those reactors by up to three years, lowering construction costs.
-- Avi Salzman and Liz Moyer
Can a Kardashian-Clan Influencer Make Meta Smart Glasses Cool?
Meta Platforms is turning to Kardashian clan member Kylie Jenner for its new line of smart glasses. Influencer marketing is common with brands that want to get their product recognized by a younger demographic. Jenner founded a successful makeup line called Kylie Cosmetics, now majority-owned by Coty.
-- It'll certainly help the Instagram and Facebook parent make the wearables
segment more mainstream. Meta Glasses start at $299, about $80 less than
its existing Ray-Ban branded smart glasses. Ray-Ban, owned by
EssilorLuxottica, is also working on this rollout but without the Ray-Ban
branding.
-- Jenner has 382 million Instagram followers. The Starfire Kylie Edition
Meta Glasses are a sleeker design than the rest of the line and start at
$399. Keran Smith, co-founder at KYFE Marketing, told Barron's the
strategy could help push what's seen as a tech product into the lifestyle
product category.
-- More tech companies are positioning smart glasses as the next big thing
in tech wearables. Snap just unveiled augmented reality glasses called
Spectacles, at $2,195. Grand View Research says the global smart glasses
market is expected to grow to $14.4 billion by 2033.
-- Meta CEO Mark Zuckerberg, speaking to analysts for the company's recent
earnings, said Meta's AI glasses continue to perform well, with the
number of people using them daily tripling year-over-year. He called them
one of the fastest-growing categories of consumer electronics.
What's Next: A September survey by S&P Global also showed that more consumers are becoming interested in the tech. Results showed that 48.2% of respondents who didn't already own a pair of smart glasses reported they were interested in purchasing a pair within the next year.
-- Angela Palumbo
Dear Quentin,
I reached my full retirement age, 67, this year, and I plan to work for at least two more years, as I am in reasonable health and my employer would like to retain me due to my 30-plus years of experience. My spouse, age 60, recently retired to spend more time with family and pursue her hobbies.
I have been investing through my employer-sponsored defined contribution plan for over 30 years, and my spouse did the same for more than 20 years until her retirement. We have combined savings of $950,000 in retirement plans, Roth IRAs and Treasuries. We own our home outright, have no debt, and maintain six months of cash equivalents as emergency funds. We are not big spenders, except for traveling abroad once a year. We live in a mid-sized city in the South with no local or state income tax.
We are both currently covered through my employer-sponsored healthcare plan, at least until I retire. After that, I will be covered through Medicare, and we plan to purchase healthcare coverage for my spouse from our current provider using a Medicare+1 option. Our only child is an adult and is not financially dependent on us, and we would like to leave some money as our legacy.
I am considering drawing Social Security after reaching my FRA while I am still working, which would increase my current income of $100,000 by another $30,000. This would result in higher taxes, but I wonder whether the impact might be offset by the fact that my spouse's $50,000 income from last year will essentially drop to zero now that she is no longer working. Alternatively, should I wait until I fully retire and draw a slightly higher benefit, even though it would be for a shorter period of time?
-- Now At FRA
Read the Moneyist's response here.
-- Quentin Fottrell
-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Callum Keown
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 24, 2026 06:42 ET (10:42 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments