Written by: Trend Research

Last week, starting from Apple's price increase announcement, the question of who can profit from the AI hardware cycle has been dissected. Micron surged by 15%, Apple dropped by 6%, and the entire tech stock sector followed with five consecutive declines, as the market repriced a supply chain logic that had been hidden for three months: storage costs have shifted from chip manufacturers' profits to the costs of downstream consumer electronics.

The mutual attacks between the US and Iran over the weekend only accelerated this turning point. With oil prices rebounding and geopolitical premiums returning, the major direction is that the market will have to choose between two paths in the coming week: will Waller continue to perform hawkish or hint at an exit? Is the non-farm data strong enough to make rate hikes a consensus or weak enough to leave space for rate cuts?

Market Performance

The S&P 500 fell 0.05% to 7354.02 points, with a weekly cumulative drop of 1.95%. The Dow Jones dropped 0.09% to 51876.11 points, with a weekly cumulative increase of 0.60%. The Nasdaq fell 0.24% to 25297.62 points, with a weekly cumulative drop of 4.60%, marking five consecutive declines for both the Nasdaq and the S&P.

Tech stocks are fragmented. Spacex dropped over 17% weekly, Oracle plunged over 19%, the largest drop since 2001, Nvidia and Google each fell nearly 9%, while Microsoft defied the trend, rising nearly 6%. Funds have shifted from growth to defensive positions, with the healthcare sector rising over 3%, led by Moderna which increased by over 10%.

The news of OpenAI delaying its IPO devastated SoftBank, causing its stock to plummet by 13%. After Micron surged by 15% on Thursday, it fell by 6.7% on Friday, as the pricing framework for the chip ecosystem has shifted from "ironclad security for AI infrastructure" to "repricing of cyclical goods."

In commodities, Brent crude dropped 4.34% to $71.99 per barrel, with a weekly cumulative drop of 10.65%; gold turned to rise 1.2% at the end of trading on Friday to $4078.7 per ounce, with a weekly cumulative drop of 3.44%. After the US-Iran mutual attacks over the weekend, oil prices rebounded, with Brent oil rising nearly 2% and US oil rising over 1% in early trading on Monday, but how long this rebound can last depends on the results of negotiations in Qatar on the 30th.

Macro and Outlook

Monday to Wednesday: Waller's Forum Debut

The European Central Bank's annual central bank forum will be held from Monday to Wednesday, where Waller will deliver a speech on July 1. This will be his first overseas appearance since taking office. In June, the Federal Reserve already signaled a hawkish stance, and if this forum maintains that position, the market will push up the likelihood of rate hikes.

Wednesday: US Non-Farm Payrolls

The US non-farm report for June is expected to show an addition of 113,000 jobs and an unemployment rate of 4.3%. If this data exceeds expectations, it will further strengthen rate hike expectations; if the unemployment rate unexpectedly jumps, the speed of repricing for rate cuts will far exceed market expectations.

This Week: Concentrated Release of Price Increases in the Supply Chain

On July 1, more than ten semiconductor companies, including Murata, Infineon, Texas Instruments, and Yangjie Technology, began raising prices by 10% to 40%. This price increase covers everything from upstream materials to end chips, directly reflecting the cost pressures behind Apple's and Microsoft's price hikes on Thursday. On the same day, Samsung announced a 1 trillion won domestic investment plan, the largest in the history of Korean companies, lasting ten years.

Federal Reserve Officials Show Hawkish Stance:

Kashkari adjusted the rate expectation for the year from "one rate cut" to "one rate hike."

Trend Perspective

The story last week is straightforward: the contrasting performance of Micron and Apple points to the same issue - the cost dividend of AI hardware is shifting from chip manufacturers to consumer electronics companies. Micron's 15% increase indicates "supply-demand mismatch, prices will continue to rise," while Apple's 6% decline signifies "I cannot absorb the costs and can only raise prices." The market's choice is clear: the place to make money is upstream, while downstream is bleeding.

The US-Iran mutual attacks over the weekend changed the trajectory of oil prices, but did not alter the fact of this supply chain. This week's real turning points will be Waller and the non-farm data. If Waller remains hawkish and the non-farm data is again strong, high-valuation tech stocks will continue to be under pressure, as the cost pressures transmit downwards while the expectations of rising rates also impact valuations. If Waller or any non-farm data indicates easing signals, chip stocks and tech leaders will have a rebound window.

This week's market direction will depend on how these two matters unfold.