Chip stocks suffered a wobble, and investors had better hope that’s all it is.

Insatiable demand for all things semiconductor and artificial intelligence is underpinning this stock market rally. The PHLX Semiconductor Index dropped around 6% Tuesday, and the S&P 500 had a bad day as a result—the opposite was happening early Wednesday.

While SpaceX’s abrupt entry into the highest echelon of U.S. companies is grabbing the headlines, the emergence of two other stocks in the top 10 most valuable list tells the real story of this market.

Broadcom and Micron have both joined the trillion-dollar club in recent months, while Advanced Micro Devices—up 20% in the past month—isn’t far off. Other chip stocks up double digits in the past month include Lam Research, Applied Materials, Sandisk, and Western Digital.

But Micron and SpaceX aside, the biggest names are struggling. Broadcom is down 11% over the past month, while Nvidia, Alphabet, Microsoft, and Amazon are all down between 6% and 8%.

SpaceX is a law unto itself at this point, rising irrespective of whether the broader technology sector is having a good day. And Micron is getting a seemingly relentless boost from the memory-chip shortage.

Glass-half-full investors will say that if the Magnificent Seven can join the party then the rally can keep going. But if the chip-stock momentum runs out of steam it could be a big problem for the stock market.

—Callum Keown

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The Federal Reserve will conclude its two-day policy meeting later today, and the least interesting aspect will be its decision on interest rates. Instead, all eyes and ears will be on Chairman Kevin Warsh as he takes the stage at his first post-meeting news conference.

• While President Donald Trump has indicated he prefers his Fed pick to lower rates, higher inflation and stable employment conditions are far more likely to argue for keeping rates steady, at least for now. Warsh comes to the Fed armed with a self-proclaimed reform agenda.

• Many expect some of his biggest ambitions regarding change to take time to implement. Still, the news conference is expected to provide investors and Fed watchers with a better sense of his priorities. The biggest change could target forward guidance.

• The Fed is expected to drop the previous language in the policy statement that suggested the next action would likely be a rate cut. Cleveland Fed President Beth Hammack, Dallas Fed President Lori Logan, and Minnesota Fed President Neal Kashkari all dissented against the language in April.

• Questions during the afternoon news conference will likely seek to address Warsh’s plans for communication changes, including the number of future postmeeting press conferences. Warsh previously refused to commit to keeping the tradition of speaking with reporters after every meeting.

What’s Next: Fed hawks aren’t just worried about inflation; they fear the consequences of 62 months of price growth above the Fed’s 2% target. The new set of economic projections will likely show slightly higher median inflation forecasts for year end than the Fed’s previous forecast.

—Megan Leonhardt

Some of the world’s biggest investors held their bullish outlook on stocks even before signs of detente between the U.S. and Iran emerged, as Bank of America’s latest Global Fund Manager survey points out. Most say growth and profits will outweigh the risk of interest-rate hikes and surging energy prices.

• The survey, of institutional investors managing more than half a trillion dollars over the week ending in June 11, showed continued optimism, with respondents indicating the highest levels of economic and corporate profit growth forecasts in three months. Some managers did trim positions and boosted their cash.

• More than half of those polled expect the Fed’s Kevin Warsh to execute a “hawkish hold” on rates today but see increases coming over the next 12 months as price growth tied to the U.S. war with Iran continue to pressure headline inflation readings over the coming months.

• In fact, inflation remains the market’s key “tail risk,” according to the BofA survey, replacing worries over the spread of global military conflicts and topping concerns of a bubble in artificial-intelligence stocks. Headline inflation in the U.S. hit 4.2% last month, the highest in three years.

• Simon MacAdam, the deputy chief global economist at Capital Economics said the headline inflation number likely peaked in May, assuming the deal doesn’t collapse and oil prices renew their surge. 

What’s Next: Investors still see the tech sector trading at unhealthy levels, with a survey record high of 80% suggesting that long positions in global semiconductor stocks remain the market’s “most crowded” trade. About one-fifth said the current AI investment cycle is in a stage of “euphoria.”

—Martin Baccardax

Starstruck investors made SpaceX a more valuable company than Amazon on Tuesday, as Elon Musk’s rocket and artificial intelligence company extended its stellar start to life on the public market.

• Shares, which trade under the ticker SPCX, rose 4.8% to $201.80, shrugging off a broader selloff. The S&P 500 slipped 0.6% as Wall Street sold tech stocks and bought laggards.

• The rally gave SpaceX a total market capitalization of $2.66 trillion at the closing bell, making it the U.S.’s fifth-largest company—behind chip designer Nvidia, Google parent Alphabet, iPhone maker Apple, and IT company Microsoft. It passed Amazon, valued at $2.65 trillion.

• Beyond post-IPO momentum, one thing that might have helped is a deal with Cursor. SpaceX on Tuesday announced it was combining with the agentic AI software coding tool, which competes with the likes of Anthropic’s Claude. The price is $60 billion, paid in SpaceX stock.

• SpaceX has been on a tear to start its life as a public company. Shares gained 19% on their trading debut on Friday, then jumped another 20% on Monday. SpaceX’s market cap rose by about $760 billion across the two sessions—more than the value of Intel.

What’s Next: If SpaceX stock continues to surge, its market cap may well top Microsoft’s over the next few days. The IT company, valued at $2.93 trillion, is expected to generate calendar year 2027 sales of $420 billion and operating profit of $194 billion. SpaceX is expected to generate sales of $65 billion and operating profit of $3 billion.

—Al Root and George Glover

General Motors and Lockheed Martin are collaborating on efforts to combine GM’s high-volume manufacturing capabilities with Lockheed’s defense expertise to strengthen the defense supply chain and expand munitions production capacity. The move comes amid a Trump administration push to boost military production.

• America’s security depends not only on developing advanced technologies, but on its ability to produce them “quickly, reliably and at scale,” said Frank St. John, chief operating officer at Lockheed. The Defense Department is supporting the collaboration.

• The Trump administration has signed deals with Lockheed and other munitions makers to boost missile production. It has been running drone competitions to more rapidly put technologies from the Ukraine and Iran wars in the hands of the U.S. military.

• President Donald Trump invoked the Cold War-era Defense Production Act to try to increase production of critical munitions, citing “limited production capacity, fragile supply chains, long-lead dependencies, and related production bottlenecks,” in a memo to Defense Secretary Pete Hegseth released Tuesday.

• The U.S. is concerned about a potential weapons shortfall after the Iran war, and doubts that Americans weapons makers can meet extra demand, The Wall Street Journal reported. Replacing the stockpiles of long-range Tomahawk missiles and air-defense missiles could take up to six years, officials told the Journal.

What’s Next: Some administration officials think that the high munitions-expenditure rates could complicate the Pentagon’s ability to defend Taiwan from a possible Chinese invasion near-term. The White House and the Pentagon dispute this. Congress must approve the long-term deals and funding before the Pentagon can lock in contracts.

—Al Root and Janet H. Cho

Hollywood’s summer box office sales since May 1 are