U.S. stocks ushered in a "quiet week" amid concerns about inflation: service industry PMI and financial reports from consumer giants took over, and SK Hynix's IPO on Friday became the focus of the audience
After a holiday-shortened trading week packed with labor market data and a surprise non-farm payrolls report, investors are heading into a period of relative calm in the coming week. After a mixed performance on Thursday, with the S&P 500 closing flat, the Nasdaq down 0.8% and the Dow Jones rising 1.1%, the market is set to pack its bags again this week. Monday is likely to be the most interesting day on the economic calendar, with a series of index readings from S&P Global and the Institute for Supply Management (ISM) giving investors a sense of the state of the U.S. services economy. Prior to the release of this data, monthly private sector employment numbers released by data provider ADP showed that the service industry was the absolute main force in job creation in June. In the corporate world, earnings from PepsiCo (PEP) on Thursday and Delta Air Lines (DALUS) on Friday will be in focus this week. PepsiCo's results should give investors some insight into the state of the U.S. consumer, while Delta Air Lines will provide another look at the lasting impact of the war with Iran and the resulting energy crisis. SK Hynix is expected to be listed on Nasdaq on July 10 (Friday). The US$29 billion listing plan may become the largest US stock IPO of a foreign company in history. Jobs report throws doubt on rate hike bets As of Thursday, markets were increasingly convinced that a rate hike by Kevin Warsh's Federal Reserve this year was a certainty. Then, the June employment report came out. The U.S. economy added 57,000 jobs last month, about half of what economists expected. Meanwhile, May's huge increase in nonfarm payroll employment of 172,000 was revised down to 129,000, and April's number was also revised down from 179,000 to 148,000. This is clearly not the shining example of a healthy labor market that Warsh had been counting on. Although after the release of the report, the market still assumed that the Federal Reserve would raise interest rates once this year, the market's confidence fell slightly. On Thursday morning, traders saw a roughly 75% chance that interest rates would be higher than current levels by the end of the year, according to data from CME Group. On Wednesday, the probability was about 84%. In his first press conference since the Fed's policy decision, Chairman Kevin Warsh focused on inflation and the goal of bringing inflation back to the Fed's 2% target, a goal that remains elusive amid the energy shock from the Iran war. Despite June's softer jobs data, many economists believe there may not be a particularly strong link between inflation and unemployment at the moment, leaving the pressure firmly on the price data - something to remember as earnings season approaches. The story of AI in the first half of the year belongs entirely to hardware Use one word to describe technology stock trading in the first half of 2026, and that is "imbalance." The iShares Extended Technology & Software ETF (IGV), which tracks various stocks in the technology sector, is down 12% this year. Even the "Big Seven," once a mainstay of large-cap tech stocks, as a group have lost 2% for investors over the past six months. On the other hand, chip stocks have had an explosive six months, driven by a frenzy for memory and storage sales and demand for the traditional processors needed to run AI deployments. Micron is the poster child for explosive growth in the first two quarters of this year, with its stock price soaring an astonishing 308%. Intel (INTC.US), which is committed to transformation and restructuring, also recorded an impressive increase of 280%, while AMD (AMD.US) rocketed by 173% during this period. Add it all together, and the Philadelphia Semiconductor Index, which tracks chip trading, has given investors about a 75% return since Jan. 1. Vivek Arya, a technology analyst at Bank of America, said that this trend is unlikely to change as the construction of the physical backbone network behind AI continues to advance at full speed. This is yet another reminder that while AI may be a product of software-minded Silicon Valley, the AI economy is physical.
"We reiterate our thesis that the AI industry is moving from having to defend ROI to addressing structural and physical (chips, power) constraints," Arya wrote to clients. "Memory chip shortages and price inflation remain critical dynamics." SK hynix lands on U.S. stock market SK Hynix's $29 billion U.S. stock market listing could become the largest foreign IPO ever, but it's not just about raising money. It's also about competing in the hottest area of global stock markets: memory chips for artificial intelligence (AI) computing. The South Korea-based semiconductor maker has been trading at a discount to its main U.S. rival Micron Technology (MU.US) for years. At a time when companies making memory chips and other equipment used in AI data centers are driving performance in the S&P 500, tapping into the world's deepest stock market and its enthusiasm for all things artificial intelligence could help change that discount. For most U.S. investors, betting on SK Hynix has been very difficult, if not impossible. Like Micron, which is the second-best performing stock in the S&P 500 this year with a stunning 242% gain, SK Hynix has benefited from surging demand for high-bandwidth memory (HBM) chips. However, directly owning SK Hynix's South Korean-listed shares means trading must occur during non-business hours in the United States. SK Hynix is expected to list on Nasdaq on July 10, which should change that and improve the team's lagging valuation. The South Korean company trades at 6.2 times its expected earnings over the next 12 months. After the stock plunged 14% last week, its worst performance since March, Micron currently trades at 7 times earnings, but as recently as June 22, its price-to-earnings ratio was more than 11 times.
"We reiterate our thesis that the AI industry is moving from having to defend ROI to addressing structural and physical (chips, power) constraints," Arya wrote to clients. "Memory chip shortages and price inflation remain critical dynamics." SK hynix lands on U.S. stock market SK Hynix's $29 billion U.S. stock market listing could become the largest foreign IPO ever, but it's not just about raising money. It's also about competing in the hottest area of global stock markets: memory chips for artificial intelligence (AI) computing. The South Korea-based semiconductor maker has been trading at a discount to its main U.S. rival Micron Technology (MU.US) for years. At a time when companies making memory chips and other equipment used in AI data centers are driving performance in the S&P 500, tapping into the world's deepest stock market and its enthusiasm for all things artificial intelligence could help change that discount. For most U.S. investors, betting on SK Hynix has been very difficult, if not impossible. Like Micron, which is the second-best performing stock in the S&P 500 this year with a stunning 242% gain, SK Hynix has benefited from surging demand for high-bandwidth memory (HBM) chips. However, directly owning SK Hynix's South Korean-listed shares means trading must occur during non-business hours in the United States. SK Hynix is expected to list on Nasdaq on July 10, which should change that and improve the team's lagging valuation. The South Korean company trades at 6.2 times its expected earnings over the next 12 months. After the stock plunged 14% last week, its worst performance since March, Micron currently trades at 7 times earnings, but as recently as June 22, its price-to-earnings ratio was more than 11 times.