Review & Preview: Even Apple Has a Budget

Story Time. It a Goldilocks kind of day -- just not in the way you think.

The Dow Jones Industrial Average was hot for most of Thursday. The index rose 0.1%, briefly crossing the 52,000 mark during intraday trading before paring back some of those gains.

Investors had a much cooler view of the Nasdaq Composite, which closed 0.5% lower. And the S&P 500 stayed flat. Six of the index's 11 sectors posted gains today, helping overcome tech losses that weighed so heavily on the Nasdaq.

Earlier in the day, it actually seemed as if tech stocks would rally. Micron Technology reported solid earnings and guidance Wednesday afternoon and pushed other tech giants higher. That rally fizzled out soon after Apple announced it would have to jack up prices on MacBooks and iPads to offset the rising price for memory chips. The Roundhill Magnificent Seven ETF fell 2.6% today, and is on pace for its worst month on record.

"These two stories are inextricably related and have led to a session that has caused major indexes to search for direction," said Steve Sosnick, chief strategist at Interactive Brokers.

Apple's announcement widened the schism between the companies powering the AI buildout, and those that are their key consumers. "This morning's news reminds us that the semiconductor manufacturers and other suppliers are gaining at the expense of their largest customers," Sosnick added.

If even Apple can't bear the price increases without passing them along to customers, there may come a point when the hyperscalers themselves -- like Alphabet or Microsoft -- decide they have spent enough. The mere notion that these companies are no longer increasing their AI spending would be enough to spook the markets, Sosnick said.

We're not there yet, but it's worth keeping an eye out.

The Hot Stock: Sandisk +22% The Biggest Loser: Apple -6.1%

Best Sector: Industrials +2.2% Worst Sector: Consumer Discretionary -1.8%

We Still Have an Inflation Problem

Gulf-state oil may be trickling back into the global economy and lowering gas prices, but we're still staring down the barrel at months of sticky inflation.

Headline PCE inflation climbed 4.1% year over year in May, surpassing 4% for the first time in three years. Blame fuel for the surge: prices for gasoline and other energy goods jumped 6.5% in May compared to April, contributing to an upwards trend that included a 5.5% increase in April and a 20.9% rise in March.

The recent retreat in oil prices -- Brent crude futures now trade at around $75 a barrel -- means that we've likely hit peak inflation.

That doesn't mean we've solved the problem, though.

"How quickly a sustained decline in energy prices may also seep into core inflation remains to be seen, as other factors -- most notably service sector and housing inflation -- play a greater role," wrote Jim Baird, chief investment officer of Plante Moran Financial Advisors.

Core PCE inflation rose 0.3% on the month in May, and increased 3.4% compared with a year ago, well above the Fed's 2% target. Nationwide Chief Economist Kathy Bostjancic estimates core inflation may stay at this peak level for another month, and only gradually tick lower in the second half of the year. That puts the Federal Reserve in a tight spot.

"We believe that this and an easing in core inflation readings should allow the Fed to keep rates on hold this year, that said odds of a rate hike have risen sharply after the Fed's hawkish shift last week," Bostjancic adds.

The Calendar

The University of Michigan releases its consumer sentiment survey for June tomorrow.

What We're Reading Today

   -- Wendy's Meme Rally Took a Pause. Short Sellers Are on Watch. 
 
   -- Former Top Diplomat Wendy Sherman Says the Iran War Could Transform 
      Global Commerce 
 
   -- Retailers Are Getting Billions in Tariff Refunds. Will It Save the 
      Stocks? 
 
   -- IBM Unveils Prototype for Sub-1-Nanometer AI Chip. Why It Matters. 
 
   -- Bayer Wins Big in Supreme Court on Roundup Weedkiller. The Stock Jumps. 

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June 25, 2026 19:55 ET (23:55 GMT)

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