Markets Overview

The S&P 500 finished Thursday right on the cusp of a critical support line; a break lower could portend significant near-term losses for equities. Meanwhile, the space sector is experiencing a brutal reality check, with Space Exploration Technologies (SPCX) down 30% from its stellar IPO debut as the initial investor FOMO officially fades.

Earnings Reports

Micron Technology (MU) obliterated expectations, sending shares up 14% in after-hours trading on the back of massive AI-driven demand. The memory giant posted revenue of $41.46 billion (versus $35.84 billion estimated) and an adjusted EPS of $25.11 (versus $20.78 estimated), while record-breaking adjusted gross margins of 84.9% topped even Nvidia (NVDA). SanDisk (SNDK) also continued its historic tear, with the stock soaring over 20% on the day to cross $2,300 per share—up from roughly $40 just a year ago.

Fed & Economic Data

Hot inflation data threw cold water on the markets, as Core PCE inflation rose to 3.4% and headline PCE hit 4.1%, causing the probability of a Federal Reserve rate hike to soar. Fed Chair Kevin Warsh stated that rate cuts aren't coming anytime soon, explicitly placing the blame on President Trump's policies. Despite the hawkish macro backdrop, JPMorgan Chase (JPM) cleared the Fed's annual stress test with flying colors, promptly announcing a 10% dividend hike paired with a massive new $50 billion buyback authorization.

Hot Sectors

The artificial intelligence and semiconductor sectors received a massive international catalyst as Japan announced a staggering $2.3 trillion investment plan for AI and chips through fiscal 2040. Conversely, traditional IT consulting and services firms like Accenture (ACN), Cognizant (CTSH), and EPAM are seeing their premium multiples collapse, trending rapidly toward the 0.3 to 0.6 price-to-sales multiples typical of traditional staffing agencies.

Stock News

SpaceX (SPCX) is facing severe valuation scrutiny, trading at $157 per share while Morningstar pegs its fair value at just $62—a staggering $1.2 trillion discrepancy. In a surprising move from Berkshire Hathaway's new era, Greg Abel just snapped up 3 million shares of Macy's (M), signaling a potential deep value play in battered retail. Additionally, Michael Burry's newly disclosed position in Microsoft (MSFT) is turning heads, serving as a contrarian vote of confidence for a mega-cap tech leader that has recently fallen out of favor with the momentum crowd.

Market Analysis

Wall Street veteran Jim Paulsen is warning that current earnings exuberance may be setting the market up for a fall, particularly as the major indices test critical technical support levels. Investors are caught in a tug-of-war between the undeniable fundamental growth of AI leaders and the looming macroeconomic threat of resurgent inflation and potential rate hikes. With the OpenAI IPO reportedly delayed and space stocks cratering, the broader market's risk appetite for unproven hyper-growth IPOs appears to be cooling rapidly.