AI Raised $26.5B. Inflation Left a Scar.

GOOD MORNING, Wall Street ended Friday less than half a percent from a record, and the AI trade just passed one of its biggest capital-market tests yet. SK Hynix raised more than $26 billion in its U.S. listing and finished its Nasdaq debut 13% above the offer price. Oil eased as traders bet U.S.-Iran talks could eventually normalize shipping through Hormuz. But Delta delivered a reminder that lower crude does not instantly erase an energy shock: fares raised to recover fuel costs are holding. AI capital appetite is still enormous. Some of the inflation created by the spring oil spike may be stickier than the oil price itself.

MARKETS | TLDR

Wall Street finished higher and near records: The S&P 500 gained 0.42%, the Nasdaq rose 0.29% and the Dow added 0.29%, leaving the S&P just 0.45% below its June record close.
SK Hynix revived the semiconductor trade: The memory-chip leader ended its Nasdaq debut 13% above the $149 offer price after raising more than $26 billion in one of the largest U.S. listings ever.
Oil settled lower on hopes for smoother Hormuz shipping: Brent fell 0.4% to $76.01 and WTI lost 0.9% to $71.41, although both contracts still finished the week higher after renewed U.S.-Iran attacks.

SK HYNIX

The AI Trade Just Passed a $26 Billion Capital Test

SK Hynix finished its first Nasdaq session at $170, roughly 13% above the $149 offer price, after raising more than $26 billion through the sale of American depositary receipts. The listing gave U.S. investors direct access to the world’s leading supplier of high-bandwidth memory, the specialized chips paired with accelerators from Nvidia and other AI-compute vendors.

The deal matters because semiconductor stocks had already started to wobble after an extraordinary first-half rally. Investors were questioning valuations and whether hyperscaler spending could keep accelerating indefinitely. A share sale this large could easily have exposed weak demand. Instead, it was heavily subscribed and traded higher, showing that institutional appetite for scarce AI infrastructure assets remains deep even as the sector becomes more volatile.

The next question is supply. CEO Kwak Noh-jung told Reuters Friday that the memory industry could face its worst-ever shortage in 2027 and that demand may outstrip SK Hynix’s production capacity beyond 2030. The company plans to use fresh capital to expand manufacturing. That supports the bull case while creating the long-term tension: today’s scarcity is attracting exactly the investment that could eventually change the pricing power investors are paying for.

AIRLINES

Oil Fell. Delta Says the Fare Hikes Can Stay.

Delta Air Lines reaffirmed its full-year profit outlook Friday and issued a stronger-than-expected third-quarter forecast, saying fare increases pushed through during the spring fuel shock were continuing to hold even as energy prices came off their highs. CFO Erik Snell said the airline had recovered roughly 60% of its second-quarter fuel-cost increase through higher pricing and expected to recover more in the current quarter.

That makes Delta more than an airline earnings story. Commodity shocks can reverse quickly, but the prices businesses charge in response do not necessarily follow them back down. Delta said third-quarter flying volumes would be roughly flat to slightly higher from a year earlier, suggesting revenue gains are coming more from fares and passenger mix than simply adding capacity.

The company still absorbed the highest quarterly fuel expense in its history, with adjusted earnings falling from a year earlier despite record revenue. But if stronger demand lets airlines preserve higher prices after fuel moderates, the inflation impact of the energy shock lasts longer than the crude chart suggests. That is the kind of second-round effect the Fed will care about as June CPI arrives next week.

HEADLINES

Meta plans to start producing its own AI chip in September: The “Iris” accelerator is part of Meta’s push toward 14 gigawatts of compute capacity next year and another example of hyperscalers trying to capture more of the economics currently flowing to merchant chip suppliers.
Micron raised its U.S. investment commitment above $250 billion: The memory maker accelerated its domestic buildout and ultimately aims to produce roughly 40% of its DRAM in the U.S., extending the physical investment boom behind AI.
Meta jumped 6% to its highest level since April: The move reinforced Friday’s risk-on AI tone even as the broader semiconductor index was nearly flat.
Delta fell despite stronger guidance: Shares lost 1.8% as investors balanced healthy demand and sticky fares against renewed fuel-price volatility from the Middle East.
The earnings bar is already high: Analysts expect second-quarter S&P 500 earnings to rise about 24% year over year, with technology doing much of the lifting — leaving near-record indexes little room for disappointing guidance.

UPCOMING

TSMC June sales — July 13: The monthly release was postponed from July 10 because of a typhoon day-off in Taiwan and will provide the next read on advanced-chip demand ahead of earnings.
U.S. CPI — July 14: June inflation is the week’s biggest macro catalyst, with investors looking for evidence that the spring energy shock is fading rather than spreading into broader prices.
Major U.S. bank earnings — July 14: JPMorgan, Goldman Sachs and other large lenders will give the first major read on trading, dealmaking, credit and the health of corporate activity.
TSMC earnings — July 16: The world’s largest advanced-chip manufacturer will test whether AI demand, margins and capital spending remain strong enough to justify the semiconductor sector’s first-half rally.

DEEP INSIGTHS

SK Hynix CEO Sees the Worst Memory Shortage Yet in 2027

Read this for the supply-side thesis behind the $26 billion listing. SK Hynix believes AI-related memory demand could exceed its production capability for years even as it aggressively adds capacity. That is the scarcity story supporting HBM pricing and investment — but it also shows why the sector is entering such a large capital cycle.

Take Five: Chips, Banks and Volatility

This is the cleanest setup for the week ahead. TSMC, bank earnings, CPI and Middle East headlines all arrive with U.S. equities near records and semiconductor stocks increasingly volatile. The central question is whether strong earnings and AI demand can keep carrying valuations if inflation and geopolitical risk refuse to disappear.