Monthly Market Observations — June 2026

Three developments defined May 2026: (1) Memory Lapse -- Rampant AI compute demand created extreme memory shortages, with Micron Technology joining the $1 trillion club after a 19% single-day surge; High Bandwidth Memory is sold out past year-end and has become a primary bottleneck alongside TSM fab allocations and power infrastructure; (2) Strong Earnings, Stark Divide -- S&P 500 Q1 earnings grew nearly 29%, the best since Q4 2021, though the Mag 7 accounted for roughly 63% growth versus 17% for the remaining 493 companies; (3) Iran, Inflation, and Bonds -- April PCE came in at 3.8% headline and 3.3% core as Hormuz blockade energy costs seeped into broader measures; the ECB hiked, the BoJ raised inflation forecasts, and the 30-year Treasury yield surged above 5%. Portfolio considerations address a K-shaped consumer economy, Chapter 11 filings at a 10-year high, and rising spec-grade default projections.