U.S.-Iran talks stall; PCE and Micron earnings to shape market on June 25

Article by: Tide Research

Over the weekend, the U.S.-Iran agreement began to unravel. On Saturday, Iran’s IRGC announced the closure of the Strait of Hormuz, and on Sunday, the negotiation delegation walked out after Trump issued threats. The U.S.-Iran talks in Switzerland remain suspended. All three major U.S. stock futures declined pre-market, as geopolitical risk premiums began to accumulate once again; the direction of the negotiations is today’s most immediate pricing factor.

Last week, semiconductor stocks were the dominant theme, with the Philadelphia Semiconductor Index hitting a new all-time high on Thursday. The Fed’s hawkish stance was overshadowed by the U.S.-Iran agreement, and the S&P 500 rose 0.9% for the week. SpaceX surged 37% in its listing debut but closed with two consecutive declines, as plans for a $20 billion bond offering were revealed—marking the end of its honeymoon phase. Accenture plunged 18% on Thursday, making it the worst-performing large-cap stock of the week.

Latest status of U.S.-Iran negotiations: The Strait of Hormuz remains closed; the Iranian delegation walked out of talks on Sunday in protest of Trump’s threatening remarks. U.S. media report that Iranian officials are still in contact with U.S. counterparts, but negotiations have effectively stalled. Iran’s condition is for Israel to halt its military operations in Lebanon, while Trump has publicly warned of possible U.S. control over the Strait of Hormuz to collect tolls and threatened more intense strikes. Both sides are escalating pressure; progress in negotiations ahead of today’s market open is the most direct pricing factor for oil and energy stocks.

The inclusion of Marvell and Flex in the S&P 500 takes effect on Monday. Most passive fund weight adjustments were completed before Friday’s close; today’s opening reflects the remaining rebalancing—please note the liquidity premium for these two stocks in the first few minutes of trading.

On Tuesday, MSCI announced its annual market classification review; if South Korea is added to the developed markets watchlist, billions in passive capital will drive semiconductor ETFs. SK Hynix’s ADR application may receive SEC approval as early as this week. Both developments align in their positive impact, creating a synergistic effect for the memory sector.

Thursday, June 25 is the most significant day of the week, as the May PCE data and Micron’s earnings report are both released on the same day. Core PCE is expected to rise year-over-year from 3.3% to 3.4%; Deutsche Bank has forecast two rate hikes totaling 50 basis points this year, with the first possible as early as July. If the PCE data comes in hotter than expected, a September rate hike could shift from a probability to a consensus, reinforcing the Fed’s hawkish tone. If it comes in softer, the pace of repricing for rate cuts could exceed even the most optimistic expectations.

Micron’s earnings report is this week’s most direct litmus test for the AI narrative. Wall Street currently expects its Q3 revenue of approximately $34.5 billion, EPS of about $19.72, and a gross margin of around 81%. Its full-year HBM capacity has already been secured by customers through the end of 2026 and into early 2027. The market is now most focused on the visibility of HBM supply for 2027, the ramp-up progress of HBM4 mass production, and whether Micron can maintain its share in NVIDIA’s Vera Rubin supply chain. Micron has confirmed its inclusion as an approved HBM4 supplier for Vera Rubin—the biggest narrative upgrade last quarter. Any wording suggesting capacity constraints or conservative guidance will be amplified by short sellers, as the Philadelphia Semiconductor Index has just hit an all-time high, leaving little room for tolerance.

NVIDIA’s shareholder meeting will be held in the early hours of Beijing time, with the ramp-up of Blackwell and Vera architecture production capacity as the core focus; any statement below expectations will directly impact the AI capital expenditure narrative. OpenAI’s GPT-5.6 is expected to debut this week, transitioning from a model to an executable agent. If this coincides with Micron’s earnings report and NVIDIA’s shareholder meeting, Thursday will be the most intensive 24-hour period for AI narratives this week.

The Russell Reconstitution will take effect at Friday's close, systematically increasing volatility for small-cap stocks.

Last week’s answer was temporary; this week is the true test of the pricing framework. Two threads are running simultaneously: the geopolitical thread, watching whether U.S.-Iran negotiations can restart, and the AI thread, monitoring Micron’s guidance and NVIDIA’s production capacity. Chip stocks hit all-time highs last week—whether they can hold that level depends on the results of two key data releases this Thursday. Deutsche Bank has already conceded to Wash, forecasting a 50-basis-point rate hike this year. If PCE comes in hotter again and Micron issues conservative guidance, last week’s biggest gainers could become this week’s biggest losers. If both deliver the answers the market seeks, the AI narrative’s pricing framework will reestablish its direction—and this week’s volatility will be the entry window.