Pre Market Briefing For Friday, June 26

Source: DepositPhotos

By Eli Levy of Cannon Trading

Trade Today

The memory melt-up reverses — Apple and Microsoft hike hardware prices on the DRAM shortage, flipping AI's demand story into a cost story as a risk-off tape rolls into quarter-end.

Nasdaq futures fall ~1% as Wednesday's chip surge unwinds — Micron, SanDisk and Applied Materials all give back ground — while Apple and Microsoft blame a 98% jump in memory prices for sweeping device hikes. The VIX is back above 20, oil breaks under $70 on an Oman tanker attack, and Asia sells off hard; the only steadiers are an in-line PCE behind us and a softer dollar that let gold reclaim $4,000.

ES Fut

7,393.25

−0.40%

NQ Fut

29,426

−1.00%

VIX

20.2

+6.9%

WTI

69.27

−3.7%

Gold

4,062

+0.4%

TODAYUMich Consumer Sentiment (final) 10:00 ET — the lone scheduled print  ·  Advance trade & wholesale/retail inventories 8:30  ·  Baker Hughes rig count 1:00  ·  onsemi–Synaptics $7B all-stock deal  ·  Alphabet replaces Verizon in the Dow Monday  ·  Fed blackout lifted — first post-PCE speakers live

ACT ITrade Today

Everything a futures trader needs by 7:35 AM ET.

02

The 90-Second Read

REGIME

Risk-Off — The Memory Melt-Up Reverses Into an AI-Cost Scare

Wednesday's Micron-driven chip surge is unwinding overnight for the same reason it rose: the DRAM shortage that made Micron's quarter is now forcing Apple and Microsoft to raise device prices. What flips it: a quiet quarter-end Friday and a softer dollar could let dip-buyers stabilize the tape; a break of the 7,400 put wall with dealers short gamma turns an orderly pullback into a trend-day lower.

1. The tapeU.S. futures are lower and tech-led: Nasdaq-100 futures −1.0%, S&P −0.4%, Dow roughly flat, Russell −0.5%. Thursday's split cash close — Dow +0.14% to an intraday record, Nasdaq −0.46% for a fourth straight down day — gives way to broad overnight risk-off, Asia hit hard.

2. The reversalWednesday's memory surge is being handed back: Micron −5.2%, SanDisk −5.5%, Applied Materials −2.7% pre-market after their blowout pops. The catalyst that lifted them Thursday is the catalyst selling them this morning.

3. The flipApple raised Mac and iPad prices 20%+ and Microsoft hiked Xbox consoles $100–150, both explicitly blaming the AI-driven DRAM shortage — memory prices up ~98% in 2026. AI's demand story just became a cost story: Micron's pricing power is Apple's margin problem.

4. Cross-assetThe risk-off is broad — VIX back above 20 (+6.9%), Fear & Greed at 25 (Extreme Fear), oil under $70 (−3.7% on an Oman tanker attack), Bitcoin near $59.7k on record ETF outflows. But the haven re-armed: gold reclaimed $4,000 and yields slipped (10Y 4.38%) as the dollar eased.

5. The dayA quiet quarter-end Friday — only final UMich sentiment at 10:00 (forecast 50.0 vs 48.9). With Thursday's in-line core PCE having pushed the Fed's live hike from July toward September, today is about positioning and month-end flows, not data.

03

The Scoreboard

Every quoted price has its one home here. Index rows are Thursday's June 25 cash close; futures, Asia, commodities, FX, VIX and pre-market single names are live as of ~6:00 AM ET, Friday June 26.

Sentiment & Flow Gauges

Flow read. The gauges are openly fighting each other. CNN's index sits at 25 — Extreme Fear — and the VIX is back over 20, yet AAII bulls just spiked more than eight points to 44.9% and NAAIM exposure is still above 90: a tape that feels scared but hasn't de-risked. So the reversal this morning is a positioning unwind in the names that ran furthest on Wednesday — not a macro break, since the data behind it (in-line PCE, slipping yields, a softer dollar) is marginally friendlier than yesterday. The hazard is mechanical: per SpotGamma's Brent Kochuba, dealers are short gamma (net GEX ~−$2.1B) with cash below the gamma flip, so hedging amplifies moves. The 7,400 put wall is the floor — hold it and it stays chop; lose it and a still-long, short-gamma book turns the unwind into a trend-day lower.

Yesterday's Calls, Graded

HIT

Thursday's note insisted the melt-up was "memory-specific, not broad AI" — scarcity, not beta — and warned traders not to buy "the AI complex" on it. The reversal proves the point: the same memory names are leading the tape back down while the AI-cost story confirms the move never had broad-mega-cap support.

HIT

We argued the "fear" was a survey, not a cash-raise, leaving a crowd "positioned greedily" with no cushion into the next shock. The tape rolled over, the VIX jumped back over 20, and Fear & Greed sank deeper to 25 — the fragility we flagged showed up, even though the trigger was the AI-cost flip rather than the PCE print.

MISS

We filed gold's break of $4,000 as a disabled haven with "nothing on the other side" to cushion an equity scare. It reclaimed $4,000 within a day. As the dollar eased and yields slipped post-PCE, the debasement bid came back — so this morning's risk-off does have a haven behind it. Called too early.

04

Calendar & Scenario Map

The data wall cleared Thursday (May PCE, final Q1 GDP, claims). Today is a thin, quarter-end Friday — the only market-moving scheduled item is the 10:00 UMich read, and with the Fed's blackout lifted, any post-PCE Fed headline can move the front end.

UMich inflation expectations — 10:00 AM ETThe lone print

SOFT — 5-yr revised down

A downward revision to the 3.4% 5-yr expectation eases the "expectations un-anchoring" worry a hawkish Warsh Fed is watching, lets yields and the dollar drift lower, and gives the oversold chip names room to stabilize into the weekend.

HOT — 5-yr revised up

An upward revision feeds the un-anchoring narrative one day after a 3-year-high core PCE, hardens the "next-move-is-a-hike" path, and gives a short-gamma tape another reason to press the downside.

The reversal — does it broaden or stall?Positioning referendum

STALLS — dip-buyers & rebalancing

If quarter-end pension rebalancing and the dip-buyers Tom Lee flags step into the memory names, the unwind stays contained to Wednesday's biggest movers and the index holds its put-wall shelf.

BROADENS — gamma cascade

If the AI-cost selling spreads from memory to the broad complex and price loses that floor, dealers short gamma have to sell into weakness, and a survey-fearful, cash-heavy-long crowd gets forced out.

05

Levels & Structure

Cannon Daily Levels for the session are below. With the S&P closing Thursday at 7,357 and futures pointing lower, the structural map is unusually clean: SpotGamma puts the gamma flip near 7,437, the put wall at 7,400 and the call wall at 7,500, so cash sits just beneath the flip in negative-gamma territory — a tape where dealer hedging accelerates rather than absorbs moves. The first-hour question is binary: hold the put wall and the memory unwind stays a rotation; lose it and the short-gamma mechanics that capped Wednesday's rally work in reverse.

Cannon Daily Levels — 1 of 2

Cannon Daily Levels — 2 of 2

Volatility term structure & breadth

The VIX jumping back above 20 puts the fear gauge's vol leg in agreement with the rest of the complex for the first time this week. The term structure refines it: the curve is still in contango from the front month outward (M1 ~19.6 rising toward ~21.3 by November), so there's no structural panic — but spot (~20.3) now sits above the front future, a small front-end kink that says traders are bidding near-dated protection while the back stays orderly. Underneath, breadth is the genuine caution flag: BTIG's Jonathan Krinsky notes the S&P has slipped below its 200-day for the first time in roughly a year (see Institutional Positioning) — the index level has masked how many members are already broken.

ACT IIThe Read

Who's saying what — the PM and allocator layer.

06

Institutional Positioning

Voice cards for the names that are new or have moved. Held views live in the Desk Shift Tracker below; figures live in the Scoreboard.

Tom Lee· Fundstrat · Infl 6.15SHARPENED

Lee kept the bullish frame but added a pointed bear-case nuance on CNBC: he "still believes later this year there is going to be an abrupt change of market conditions, one that feels very much like a bear market," while declining to "stand and call a top." The house view is unchanged — year-end 8,000 target, buy-the-dip on the chip rout (semis recover within a month in ~88% of comparable >6% drops). The tension is the point: the strategist with the Street's most-cited dip-buy playbook is now openly flagging a sharper, bear-market-style break before year-end — just not yet.

Dubravko Lakos-Bujas· JPMorgan, Head of Global Markets Strategy · Infl 5.90FLASH-CRASH RISK

JPMorgan's strategy desk pairs a constructive 7,800 target with an unusually sharp warning: there is "too much momentum" in low-quality, speculative "second- and third-order AI plays," and the desk sees a "high probability of a flash-crash" in that cohort even as the broad index grinds "non-linear" higher. It is the cleanest desk-level hedge to the melt-up — not a bear call, but a flag that the most-crowded AI derivatives are where a positioning unwind bites first. This morning's memory reversal is a mild live test of that fragility.

Charlie Bilello· Creative Planning · Infl 4.75CREDIT WATCH

Bilello's weekly chart deck crystallizes today's bear thread. The bubble is migrating from equity to credit: the AI hyperscalers have issued ~$159B of debt in five months, up 47% versus all of last year, with Nvidia and SpaceX each adding $25B of supply — "every equity bubble inevitably becomes a credit bubble before it bursts." And leadership is narrowing violently: the MAGS mega-cap ETF is down ~3% year-to-date while semis are up triple digits — "they're shooting the generals" — the top-versus-bottom tech spread the widest since 2000.

Brent Kochuba· SpotGamma · Infl 5.00NEGATIVE GAMMA

Kochuba's snapshot is the mechanical key to the session. With net gamma around −$2.1B and the SPX below the ~7,437 flip, dealers are short gamma and hedge pro-cyclically — selling weakness, buying strength — which widens intraday range. He marks the 7,400 put wall as systematic support and the 7,500 call wall as the ceiling. For a futures desk: inside that band, trend-following chop; a decisive loss of that floor invites an accelerant move, while a reclaim of the flip pulls dealers back into stabilizing hedges.

Jonathan Krinsky· BTIG, Chief Market Technician · Infl 5.05BELOW 200-DAY

Krinsky supplies the medium-term technical caution. He flags the S&P has slipped below its 200-day for the first time in roughly a year, and points to 6,520 as the more important structural level beneath the near-term SpotGamma shelves — a deeper horizon, not a contradiction. He sees a further 10–15% downside concentrated in semis and AI names, with under half of S&P members above their own 200-day last week. If the put wall fails, his are the levels that matter.

07

Desk Shift Tracker

Master roster, sorted by influence score. Direction pill reflects current posted stance; carryover views show their last-published context.

08

Macro Pressure Map

Thursday's data wall resolved the week's central question in the most awkward way possible for the bulls: cleanly enough to keep the hawks in control without forcing their hand. May core PCE came in at 3.4% year-over-year — in line with consensus, but the hottest reading since October 2023 — with headline at 4.1%, while final Q1 GDP was revised up to +2.1% and consumer spending rose a strong 0.7%. "Firm but not hot enough" is the read that let traders push the Fed's live hike from July onto September (see Fed Watch).

The named macro voices converge on one uncomfortable framing: the cycle may be peaking just as the Fed is least able to help. Mohamed El-Erian said it "would not surprise me if this May PCE, or June's, ends up being the peak for this cycle," while describing the Fed as "walking on a stagflation tightrope." Navy Federal's Heather Long put the stakes plainly: with inflation at a three-year high, "Warsh has made his commitment clear to bring inflation down, and the key will be how much relief happens by September."

Cross-asset, the regime is finally cutting two ways. The strong-dollar backdrop that all week gutted the "debasement trade" eased just enough on Thursday's in-line print to let it breathe — the dollar slipped off its 13-month high, the belly caught a bid, and gold reclaimed $4,000. Oil is the genuine disinflationary force, WTI back under $70 as the Hormuz premium drains. The irony for a hawkish Warsh: cheaper energy does part of his job for him — which is why this morning's risk-off has a softer dollar and firmer gold behind it, not the airless backdrop of 24 hours ago.

09

Portfolio Positioning

The axis of the session is the round-trip in memory. Wednesday's Micron blowout — record revenue and a roughly $50B current-quarter guide — drove Micron up ~15.7%, SanDisk ~22% and Applied Materials ~13% on Thursday. This morning all three reverse: Micron −5.2%, SanDisk −5.5%, Applied Materials −2.7% pre-market. Nothing fundamental changed overnight; the market simply found the other side of the same trade — the DRAM shortage that made Micron's quarter is a cost shock for everyone who buys memory.

The genuinely new theme: Apple raised Mac and iPad prices 20%+ (the MacBook Air base jumped to $1,299 from $1,099) and Microsoft hiked Xbox consoles $100–150 effective August 1, both citing the memory shortage directly. Apple fell ~6.1% Thursday and Microsoft ~3.5% to a 52-week low; both are roughly flat pre-market, but the read-through is what matters — the AI super-cycle now has a visible margin-cost loser side, and hardware is it. It reframes the whole complex from a demand story into a cost story.

Two deals cut through the macro. onsemi agreed to acquire Synaptics for ~$7B all-stock at about a 19% premium; the acquirer fell ~12% pre-market on dilution while the target rose ~6%. And Merck is buying Bio-Techne for ~$11.3B, which jumped ~20% Thursday. Two structural notes: Alphabet replaces Verizon in the Dow Monday — a mechanical bid the index must absorb — and SK Hynix is preparing a U.S. listing near $166, a reminder the memory-cycle capital story stays global even as the U.S. names reverse..

10

Fed Watch

Status: blackout lifted — the June 17 FOMC is behind us and officials are free to speak, next decision July 29. Held: Chair Kevin Warsh's first meeting kept the funds rate at 3.50–3.75% but turned the dot plot hawkish — scrapping the easing bias, vowing to "deliver price stability," and lifting the median path so nine-plus officials now pencil at least one hike by year-end. The shift: Thursday's in-line-but-three-year-high core PCE didn't force a July move — it pushed the live meeting to September, with the bond market now pricing roughly two hikes by year-end and 2026 cut odds near zero. Watch: with the quiet period over, the first post-PCE Warsh, Waller or Bowman headline can move the front end any day; WSJ's Nick Timiraos still reads the path as hawkish, cut talk sidelined. Key read: today's UMich inflation-expectations revision is the tell on whether the "un-anchoring" worry that justifies a September hike is building or fading.

ACT IIIThe Edge

The closer — what the consensus is missing.

11

What the Consensus Is Missing

The memory super-cycle has a loser side, and the market just found it.

For two days the tape treated Micron's pricing power as an unambiguous good. The Apple and Microsoft hikes expose the other half of the same fact: when memory makers get pricing power, every device maker that consumes memory eats a margin hit. The DRAM shortage is simultaneously Micron's record quarter and Apple's reason to charge $200 more for a laptop. Consensus is still trading these as separate stories — a chip beat here, a hardware headline there — when they are one mechanism with a winner and a loser — and the loser side isn't in anyone's model yet.

"Extreme Fear" is masking a still-long book — the unwind is starting from the wrong place.

The reflex is to read Fear & Greed at 25 and a VIX over 20 as capitulation that marks a low. The positioning data says the opposite: AAII bulls just spiked to 44.9%, NAAIM is still above 90, and BofA's Bull & Bear sits at a fourth-week "sell." The crowd feels fearful but remains heavily invested — so this morning's selling is an unwind that hasn't started from a de-risked base. With dealers short gamma below the flip, a loss of the put wall wouldn't be a capitulation bottom; it would be the start of the position-clearing the surveys have pretended already happened.

Gold reclaiming $4,000 into an equity selloff means the haven is back — the cushion exists this time.

Yesterday's story was that a hawkish Fed had broken gold and disabled the portfolio shock-absorber. One in-line PCE later, gold is back above $4,000, the dollar has eased, and yields are slipping — happening while equities sell off, which is exactly how a functioning haven behaves. The debasement trade wasn't structurally dead, just over-extended, and its return means this morning's risk-off has a real cushion behind it: a market that can sell stocks and bid gold and Treasuries at once is far less fragile than one where every asset falls together — the tape we feared 24 hours ago and didn't get.