Markets Overview

Memory chips dragged the broader semiconductor sector into a bear market, with Micron (MU) trading 30% off its $1,255 52-week high despite robust AI demand. Wall Street remains divided on the trajectory for chips: JPMorgan sees a summer buying opportunity, while Morgan Stanley warns of a grueling back half of 2026. The tech rout was preceded by a 25.2% single-day plunge in IBM (IBM) on July 14 following weak preliminary Q2 results and AI capex concerns. Meanwhile, European travel felt the macro pinch as Ryanair stock slid 6% after a 34% Q1 profit hit tied to Iran war-related fuel costs and delayed summer bookings.

Earnings Reports

AMC Entertainment (AMC) stunned the market with a massive beat, posting Non-GAAP EPS of $0.14 (beating estimates by $0.16) on $1.6 billion in revenue. The surprise profitability was driven by a record-breaking $2.97 billion domestic box office that fueled high-margin concession sales.

SpaceX (SPCX) continues to be a volatility magnet just a month after its public debut, whipsawing after hitting $225 per share. Morgan Stanley initiated coverage with a $300 price target ahead of the aerospace giant's first-ever quarterly earnings report.

Palantir (PLTR) remains heavily debated among sophisticated investors, as its premium valuation now commands a forward price-to-sales multiple of over 40x.

Fed & Economic Data

New Fed Chair Kevin Warsh struck a hawkish tone during his inaugural Congressional testimony, vowing to end five years of high inflation. This macro tightening posture comes despite June CPI data showing a 0.4% monthly decline and a 3.5% annualized rate—the largest monthly drop since April 2020.

However, a Goldman economist warned that inflation is "broadening out," a sentiment seemingly echoed by Fed Governor Christopher Waller, who issued a stark 15-word warning to Wall Street regarding the rate outlook.

Globally, China’s economic engine sputtered, posting a GDP miss just 24 hours after reporting record June exports of $412.4 billion alongside record imports.

Hot Sectors

With the AI trade spooking investors amid the semiconductor bear market, Goldman Sachs highlighted three alternative investment themes for clients looking to rotate capital.

Defense stocks are also drawing fresh institutional interest as global military spending reached a record $2.9 trillion in 2025, with NATO's combined budgets surpassing $1.5 trillion for the first time in 2026.

Stock News

M&A activity is heating up in biotech, with AbbVie (ABBV) acquiring Apogee Therapeutics (APGE) for $10.9 billion in cash, and Vertex Pharmaceuticals (VRTX) announcing a massive $10 billion acquisition to expand beyond its cystic fibrosis stronghold. Pfizer (PFE) is also drawing analyst attention as a potential dark horse in the $100 billion weight-loss market.

Insider selling raised a few eyebrows last week. Airbnb (ABNB) Director Joseph Gebbia unloaded 236,601 shares for $35.5 million, while MannKind (MNKD) CEO Michael Castagna disposed of 363,200 shares.

Market Analysis

According to Jefferies, historical data suggests the S&P 500 typically climbs during the third, fourth, and fifth weeks of the financial reporting period. This implies that earnings season will truly begin to dictate market direction in the days ahead.

Looking ahead, all eyes are on July 22 for Alphabet (GOOGL), with historical patterns suggesting potential upside for the search giant. Investors are also closely tracking July 29, when Interactive Brokers is rumored to allow the conversion of SK Hynix shares into newly listed US ADRs—a catalyst that could ignite the battered memory chip space.