Peter Cohan

The S&P 500 has gone up 7.7% so far in 2026, primarily driven by a massive AI capital spending boom that has overshadowed concerns about rising inflation and tariffs. That said, May saw inflation hit 4.2%, its highest in three years. The fear of rising interest rates could impact growth. Looking ahead to the second half of 2026, investors should be mindful of how these factors will continue to shape the rest of the year. Technology, energy and healthcare sectors are sectors to continue to watch until the year closes, notably since some sectors have benefited from the tailwinds thus far. Investors may also consider hedging with cash or gold amidst volatile conditions.

Trump’s thousands of stock trades and federal decisions raise conflict questions as disclosure rules make his gains or losses impossible to measure.

Central bank communication shifted from Alan Greenspan's opaque "Fedspeak" to Ben Bernanke's transparent, rules-based approach, with explicit inflation targets and forward guidance. Greenspan, who died in 2026, favored ambiguity, but his era was linked to the 2008 financial crisis due to deregulation. Bernanke championed transparency, empirically supported for predictability and anchoring expectations. However, new Fed Chair Kevin Warsh, confirmed in 2026, is reversing this trend. His first FOMC statement eliminated forward guidance and his own rate forecast, signaling a less communicative style. Critics fear this risks losing predictability and accountability, potentially increasing market volatility and borrowing costs amid elevated inflation, with Warsh's long-term economic impact remaining uncertain.

Apple is implementing unprecedented price increases of up to 20% on Macs and iPads, citing soaring costs for computer memory chips. This surge, driven by immense demand from AI data centers and insufficient supply, has led to forecasts of some chip prices rising 355% this year. Memory suppliers are prioritizing high-profit AI server components, exacerbating scarcity for other devices. Apple, stating it can no longer absorb these expenses, saw its stock decline following the announcement. These elevated costs are expected to persist for years, potentially leading to further price hikes, including for iPhones. Analysts suggest investors consider memory chip manufacturers like Micron Technology, whose stock has surged 285%, over Apple, which faces eroding supplier bargaining power.

Apple has significantly increased prices on several Mac models, attributing the hikes to soaring memory costs driven by intense demand from AI data centers. This move signals that rising component expenses are now directly impacting Apple's hardware pricing, with analysts predicting these costs will continue to climb for years. Memory suppliers are prioritizing high-profit AI server chips, exacerbating scarcity for consumer devices. Following the announcement, Apple's stock declined, while Micron Technology, a major memory producer, saw its shares surge 285% due to strong earnings. The supply crunch is expected to persist through 2027, potentially leading to future iPhone price increases. Investors are advised to consider memory chip manufacturers over Apple.

Semiconductor stocks have plummeted this week, with major indices down over 10% and $1.3 trillion in market value erased. Companies like Intel and Micron saw significant drops. The decline stems from fears over AI infrastructure spending returns, high valuations reminiscent of the dot-com era, and a hawkish Federal Reserve, rather than a loss of demand. Hedge funds also capitalized on the downturn. Despite the short-term sell-off, Wall Street analysts maintain substantial 12-month price targets for many chipmakers, viewing the current dip as a "mid-cycle reset." However, concerns persist about unsustainable AI capital expenditures, enterprise price cutting for AI services, and Meta selling excess AI computing capacity. The bullish case highlights strong earnings growth projections and attractive valuations for some, with high-bandwidth memory sold out through 2027. A potential rebound hinges on key chipmakers exceeding high expectations in upcoming earnings reports.

Semiconductor stocks slide as Wall Street questions AI capex growth, erasing $1.3 trillion and putting Intel, Micron and AMD under pressure amid rising rate fears.

OpenAI and Anthropic are locked in a race to go public soon;Both companies filed initial public offering prospectuses in June. However, despite all their success, OpenAI and Anthropic are facing very difficult market conditions. Both companies are burning substantial cash, with Anthropic showing faster growth and a higher valuation. Anthropic has positioned itself as provider for enterprises, while OpenAI targets mass market consumers. The outcome of the first IPO could likely significantly impact the second. Retail investors looking to gain exposure to these companies prior to their IPOs may consider investing in ETFs with private holdings or buy stock in hyperscalers with stakes in OpenAI and Anthropic.

Analysts are divided on whether SpaceX is the greatest thing since railroads or a gigantic Ponzi scheme.

SpaceX stock has plummeted 25% since its June IPO, as investors reassess its $1.8 trillion valuation against deep losses in its AI and launch units. While Starlink's connectivity business is profitable, its average revenue per user is declining, forcing it to subsidize the cash-burning Space and AI divisions. Analysts widely criticized the IPO as overvalued, projecting negative free cash flow for years. Post-IPO events, including a $60 billion acquisition and a $25 billion bond sale now trading like junk, have further fueled investor skepticism. The company's complex, high-burn strategy and upcoming insider share unlock present significant challenges to its financial stability.