Chipmakers slide but Micron’s outlook shines

Good morning. Here’s what happened overnight and what you need to know today.

1.

Chip jitters: US chipmakers fell again overnight as investors grew uneasy about whether this year’s AI surge is justified, weighing on the broader market and dragging the S&P 500 down 0.1% even as most of its members rose. Concerns over debt-fuelled spending by hyperscalers and a potentially more hawkish Federal Reserve have wiped more than USD1 trillion from the Nasdaq 100 this week. Cerebras tumbled almost 20% after the newly listed chip designer warned its margins would stay negative through year-end, a reminder of the AI buildout’s heavy costs. The mood may shift though, with Micron rising 9% in after-hours trading after posting much better-than-expected earnings and outlook following the close. Oil extended its retreat as more tankers exited the Strait of Hormuz, with Brent settling 4.3% lower at USD73.74, its weakest since before the Iran war, easing inflation fears and pulling 10-year Treasury yields down nine basis points to 4.40%. Bitcoin fell more than 4% to below USD60,000, its lowest since October 2024. In corporate news, two more leading Google AI researchers are reportedly leaving for Anthropic, and OpenAI unveiled its first custom chip with Broadcom. (Bloomberg)(Reuters)(WSJ)(CNBC)

2.

Memory lane: SK Hynix said it plans to raise up to USD29.4 billion through a US stock market listing in what would be among the biggest listings globally, as the Nvidia supplier seeks to capitalise on strong investor appetite for AI stocks. The South Korean memory chipmaker plans to issue up to 17.79 million new shares via an American Depositary Receipt listing on the Nasdaq, with trading expected to start on 10 July, according to a regulatory filing. BofA Securities, Citigroup, Goldman Sachs and JP Morgan are managing the offering. If completed at the top end, the deal would be the second-biggest share sale after SpaceX’s record USD85.7 billion IPO earlier this month. SK Hynix has emerged as the top supplier of high-bandwidth memory used in AI systems, this week overtaking Samsung to become South Korea’s most valuable company. Its Seoul-listed shares have climbed about 300% this year, exceeding USD1 trillion in market value. Estimates of its HBM market share range from about 58% and 60%. (SK Hynix)(Reuters)(Capital Brief)(Bloomberg)

3.

Toll order: The board of toll road operator Atlas Arteria was criticised for being outmanoeuvred by its top shareholder IFM Investors, which has succeeded in securing control of the company via a hostile takeover bid some in the market believe was well telegraphed. Atlas Arteria told the ASX yesterday that IFM had extended its $5.10 per share offer until 7 July after its stake crossed the 50% threshold, giving it effective control. Harvest Lane CIO Luke Cummings told Capital Brief Atlas should have pre-emptively struck a deal as IFM crept up the register, and that by acknowledging it was “in a position of weakness from the get go, they could potentially have negotiated better terms” rather than rejecting the bid and losing control anyway. At least one long-term investor is holding out hope for a better deal. VanEck investments executive Jamie Hannah said the $5.10 price is undervalued, arguing IFM lacks total control until it reaches the 90% compulsory acquisition threshold. Atlas said its independent directors expect to issue a further supplementary target’s statement before the market opens next Monday. (Capital Brief)

4.

Big Short 2.0: Hedge fund manager Lee Robinson, who notched a 900% gain during the global financial crisis by betting against US subprime mortgages, is now shorting insurers over their exposure to private credit. Bloomberg reported that rather than bet directly against the USD1.8 trillion ($2.6 trillion) private credit market, Robinson is targeting some of its biggest backers: insurers. According to the report, he’s ramped up bearish wagers on firms from Lincoln National to MetLife and Berkshire Hathaway through credit default swaps. His London-based firm Altana, which manages USD570 million, is launching a new fund to protect against what he sees as an inevitable downturn in private credit, a cooling of AI hype and the impact of declining liquidity on corporate valuations. Robinson told Bloomberg the calm in markets today echoed the period before Lehman Brothers collapsed in 2008. And the trade is spreading. Other hedge funds and Wall Street desks including JPMorgan and Goldman Sachs are also targeting insurers’ CDS, people familiar told Bloomberg. Net notional bets on US insurers’ CDS rose to USD5.5 billion by 22 May from less than USD4.9 billion at the end of last year. A MetLife spokesperson pointed to comments that around 95% of its private debt portfolio is investment grade. (Bloomberg)

5.

PE probe: The US SEC’s enforcement division is probing continuation vehicles, funds typically used by private equity firms to hold on to assets they cannot or do not wish to sell, Reuters reported citing unnamed sources. SEC enforcement staff are investigating potential conflicts of interest around the vehicles, how managers value the assets, and whether investor disclosures are sufficient and consistent, according to the news agency. Continuation vehicles have surged in popularity, with fund manager-led secondary transactions worth USD106 billion last year, up from USD70 billion in 2024, according to Evercore. Traditional private equity funds run for about a decade. But the vehicles let managers transfer assets from older funds into a new vehicle, extending the holding period while giving existing investors the option to cash out while avoiding being forced to sell at a deep discount or realise losses. Critics have flagged the potential for conflicts because the manager sits on both sides of the transaction, creating incentives to skew valuations. It comes as PE firms sit on a backlog of more than 30,000 unsold portfolio companies, according to Bain & Co. (Reuters)

6.

Slop junk: Australia’s financial complaints authority warned its systems are being clogged up by AI slop as it grapples with another record year of alleged bad behaviour and braces for a major expansion of its remit. AFCA told Capital Brief it received more than 30,000 complaints in the first quarter of 2026, up 23% on the same period in 2025, itself a record year. A spokesperson said AI-generated complaints can include irrelevant, inaccurate or generic information, or legal arguments that don’t apply in Australian law, slowing the dispute resolution process as AFCA works through large volumes of material to identify the relevant issues. The data has strained the industry-funded body’s resourcing as it filters out junk reports and processes legitimate ones. The pressure comes as AFCA prepares to become the centralised dispute resolution scheme for the government’s new scam prevention framework from 31 March 2027, expanding its jurisdiction over banks, telcos and digital platforms like Meta’s Facebook and Instagram. (Capital Brief)

7.

Buyer beware: There’s an inconvenient but simple truth at the heart of the property market: if you want to improve housing affordability, you need to stop prices rising. And while the public is largely convinced of the first half, it’s less keen on bearing the consequences. As Capital Brief wrote yesterday, Labor has tied itself in knots to avoid talking about falling house prices, with Treasurer Jim Chalmers intervening after a rare admission from Housing Minister Clare O’Neil that the market was in “a correction”. In the six weeks since the budget, the government has begun removing the favourable tax treatment granted to property investment: negative gearing on existing homes is gone, as is the blanket 50% capital gains tax discount and, as of yesterday, the ability for SMSFs to borrow and buy residential property. Unfortunately for the government, a cottage industry of largely unregulated buyers agents (an estimated 5,000 of them, charging between $10,000 and $40,000 a pop) has made a handsome living aiding and abetting those investors, and is now irate. What matters is whether voters buy the argument that these measures are anti-ambition, or see them as necessary to solve the housing affordability crisis. (Capital Brief)

8.

Meme push: US fast-food chain Wendy’s shares jumped to a more than seven-month high as retail traders flocked to the beaten-down stock in the latest meme-like rally. The stock rose as much as 42% to briefly hit its highest level since November 2025 with its biggest jump since March 2020. The catalyst seems to have been a since-removed WallStreetBets post on Reddit urging members to “save Wendy’s before it’s too late”. Wendy’s ranked as the second-most mentioned stock across Reddit trading forums over the past 24 hours, according to data tracked by Swaggy Stocks, and topped the trending page on Stocktwits. The surge came a day after Wendy’s disclosed the appointment of former Potbelly executive Steven Cirulis as CFO and strategy chief, but that appeared disconnected from the move. Wendy’s shares have fallen more than 78% from June 2021 record highs, drawing heavy short selling in the process. Short interest estimates varied from 34% of free float by ORTEX to about 24% of free float by S3 Partners. ORTEX co-founder Peter Hillerberg told Reuters the stock was primed for a “short squeeze” but was not in one yet. “That only changes if the ​rally keeps running,” he said. (Capital Brief)(Reuters)(CNBC)

9.

House arrest: Donald Trump cancelled the signing of a bipartisan housing affordability bill saying he would not sign it until Congress passes the SAVE America Act, his stalled voter-eligibility bill. The move sent listed home construction stocks sharply higher on the prospect that demand from large institutional investors might not be curbed. The housing bill restricts purchases of single-family homes by big Wall Street investors and aims to boost supply. It passed both chambers with overwhelming bipartisan majorities and can become law without the US president’s signature after 10 days unless he formally vetoes it. The cancellation came hours before a tense closed-door lunch with Senate Republicans, where Trump and Republican Louisiana Senator Bill Cassidy shouted at each other over the Iran war, The New York Times reported. It also came a day after the Senate passed a resolution curbing Trump’s war powers. The SAVE America Act would require a photo ID to vote in federal elections and proof of US citizenship to register, but Republican Senate Majority Leader John Thune has repeatedly said it lacks the votes. Affordability has become a focus ahead of November’s midterm elections, with voters increasingly critical of Trump’s handling of the economy. “What is causing him to chicken out again?” Ted Lieu, a Californian Democrat said. “Is it Taco Wednesday?” (NYT)(WSJ)(Reuters)