Bloomberg Surveillance 6/26/2026

Summary

The episode focuses on the AI investment boom and its market fallout: hyperscaler capex is pressuring their margins while chipmakers like Micron capture massive earnings. A rotation into value and small-cap sectors is underway, but technical risks from leveraged ETFs and a potential narrative shift threaten the AI trade. The Fed debate intensifies as oil prices plunge and the labor market holds steady, with guests split on rate hikes versus cuts. Geopolitical concerns around Iran's Strait of Hormuz and a delayed OpenAI IPO add to uncertainty.

• AI infrastructure spending creates a massive wealth transfer from hyperscalers to chipmakers like Micron, NVIDIA, Broadcom.
• Micron's 85% margins signal pricing power but raise fears of demand destruction for customers.
• Investors rotate out of Magnificent Seven into regional banks, biotech, and small-cap industrials.
• Leveraged ETFs and retail exuberance in semiconductors amplify volatility and downside risk.
• Fed officials hint at possible rate hikes as core PCE stays at 3.4%, but some expect cuts due to supply-side inflation.
• Oil prices drop below $69 WTI despite tensions in the Strait of Hormuz; Iran seeks tolls.
• OpenAI may delay its IPO until 2027, cooling enthusiasm for AI private valuations.
• Fixed income offers attractive real yields; BlackRock recommends lending into credit.