Sowell’s technical gauges took the previous week’s pullback in stride and found renewed strength in last week’s rebound. Despite volatility’s ongoing attempts to steal the spotlight, our positioning remains confidently fully invested, guided less by market drama and more by the steady counsel of our technical and fundamental indicators.
If last week was a thriller with no lasting villain, this week was a sequel that somehow topped it — same cast, higher stakes, and a finale nobody saw coming. When the opening bell rang Monday morning, markets were still nursing last week's wounds: the Nasdaq had just posted its worst single session since April 2025, the Philadelphia Semiconductor Index had been taken behind the woodshed, and traders were staring down a calendar loaded with potential tripwires. CPI. PPI. Jobless claims. Oracle. Adobe. And, oh yes — Elon Musk's rocket company was about to go public in the largest IPO in the history of capitalism.
By Friday's close, the S&P 500 had climbed back to 7,431, the Nasdaq Composite settled at 25,889, and the Dow reclaimed 51,202. It wasn't a clean recovery, and it certainly wasn't boring — largely because they found something they could agree on: the price of oil was falling, and a rocket ship was launching.
The Data Dump: A Lot of Noise, One Clear Signal
This was a week drowning in economic releases, and parsing what mattered from what merely alarmed took some effort.
Start with the Consumer Price Index. Wednesday's CPI print for May arrived like a suspect who shows up at the police station before anyone calls — not quite off the hook, but not exactly caught in the act either. Headline CPI rose 0.5% for the month, putting the annual rate at 4.2%, both in line with expectations. That 4.2% annual pace is up from 3.8% the prior month and represents the highest inflation reading since April 2023. Not a comfortable headline. Core CPI — the Fed's preferred measuring stick, stripped of the drama of food and gas prices — rose just 0.2% for the month, below the 0.3% consensus, translating to a 2.9% annual rate.
Here's the twist: almost all the heat was coming from energy, which jumped 3.9% in the month and a staggering 23.5% year-over-year. Core commodities actually “fell” 0.1%, suggesting that whatever trade-war tariff inflation fears had been baked into the bond market may be getting a bit overdone.
That's the good news. The not-so-good news came Thursday when PPI landed with a thud. The headline Producer Price Index rose 1.1% in May — well above the 0.7% Dow Jones consensus estimate. On an annual basis, headline PPI surged 6.5%, the biggest year-over-year jump since November 2022. Core PPI, excluding food and energy, rose a more manageable 0.4% against the 0.5% estimate, again pointing to rising fuel prices as the primary inflationary culprit rather than broad-based pricing pressure. The story, read correctly, is an oil story wearing an inflation costume.
Also worth noting: the University of Michigan's one-year inflation expectation came in at 4.6%. Below forecast, but still the kind of number that keeps Fed chairs up at night and should keep investors humble about declaring victory on prices.
The rest of the week's data didn't exactly paint a portrait of a booming economy. The NFIB Small Business Optimism Index slipped 0.6 points to 95.3 in May.
Wholesale Inventories came in at 0.6% against a 0.4% estimate — a modest overshoot that suggests some supply-chain rebuilding is underway, but nothing dramatic. Initial Jobless Claims for the week rose 4,000 to 229,000, above the 220,000 economists had penciled in, and Continuing Claims ticked up to 1.795 million. Not alarming, but a subtle reminder that last week's blowout jobs report may not be the whole story. The labor market, like most things in 2026, is showing cracks underneath a relatively solid surface.
And yet — markets largely shrugged. Why? Because WTI crude oil dropped below $85 per barrel as the Iran peace deal narrative took hold, and at this stage of the cycle, an oil price falling $10-plus in a week does more for the inflation outlook than almost any data release. When energy is the engine of CPI and PPI alike, cheaper oil is the market's antidepressant.
Oracle, Adobe, and the Market's Favorite New Game: "Good Results, Wrong Reaction"
Wednesday evening, Oracle reported fiscal Q4 2026 results that, by any reasonable standard, were exceptional. Total revenue reached a record $19.2 billion, up 21% year over year. Cloud revenue surged 47%. The company's AI database business was described by management as "our fastest growing business ever" — growing 404% in Q4 alone. For the full fiscal year, Oracle generated a record $32 billion in operating cash flow, with full-year revenues climbing 17% to $67.4 billion. Wall Street's response? The stock dropped more than 13% during the week.
The culprit was what they didn't promise. Guidance came in softer than some investors had hoped, and elevated capital expenditure projections of $55.7 billion raised eyebrows about the return on all that AI infrastructure spending. Markets, it seems, have developed an allergy to spending money to make money, at least when the money being spent involves large round numbers.
Adobe fared better on the results — record Q2 revenue of $6.62 billion, up 10% year-over-year, with EPS of $5.96 beating the $5.81 consensus — but got ambushed by a curveball nobody saw coming. CFO Dan Durn announced he would be departing June 15th to become Marvell's new CFO. Adobe tumbled 18.86% on the news.
The Main Event: SpaceX Goes Public
And then Friday happened — SpaceX priced its IPO Thursday night at $135 per share, raising $75 billion in the largest initial public offering in the history of global capital markets — more than 4x oversubscribed, a testament to the pent-up appetite for a name that had been the most coveted private company on the planet for years. The stock opened Friday morning at $150, jumped as high as 30% intraday, and settled at $160.95, a first-day gain of 19.2%. At the IPO price, SpaceX was valued at roughly $1.8 trillion. By Friday's close, that market cap had climbed to approximately $2.11 trillion.
The SpaceX debut did more than make history. It did something harder: it restored animal spirits to a market that had been having a rough week.
And here's a number worth pausing on that has nothing to do with SpaceX directly: for the first time ever, every single company in the S&P 500's top ten by market capitalization now boasts a valuation in the trillions. Every one. And SpaceX, at $2.1 trillion and counting, isn't even in that index yet. We are living in an era of trillion-dollar companies, just as previous generations lived in an era of billion-dollar companies.
The Week Ahead — Kevin Warsh Steps Into the Arena
Everything this week was a table-setter. The main course arrives Wednesday.
The June 16th-17th FOMC meeting will be the most closely watched policy event in months — and here's the thing: it's not really about the rate decision. Markets are pricing in no change, and that's almost certainly what they'll get. This meeting is actually about Kevin Warsh's inaugural press conference as Fed Chair, specifically what he says about the path forward.
Warsh inherits a Fed that has held rates steady while inflation re-accelerated to 4.2%, a 10-year Treasury that can't quite decide where it belongs, and an oil market that may be on the verge of a major structural shift. His opening statement will be parsed like the Rosetta Stone. Will he signal patience? Will he push back against the market's quiet hope for a rate cut? Will he acknowledge that falling oil prices, if sustained, could give the Fed room to maneuver?
The markets will be listening for any hint. If Warsh delivers a hawkish tone, the 10-year will test 4.6%. If he leans toward data-dependency with a dovish tilt, expect a Treasury rally and equity follow-through. One thing is virtually certain: whatever he says, he will say it very carefully, and someone in every seat of the press conference room will hear something different.
“All these bombs got dropped. What actually pressures each side? In each case, it was an economic sanction. It was Iranians closing the strait and us imposing a blockade and sanctions before that. So it was actually economic pressure that moved people, not all these bombs that got dropped, and that should be a lesson for leaders going forward."
— The Atlantic Columnist David Brooks, PBS NewsHour Brooks and Capehart on the tradeoffs of a possible Iran Deal, June 12, 2026.
Perspectives by Ben Ashby
The Frenzy, The Funding, and The Folly
"He had just enough money to last him a lifetime, unless he bought something."
— Saki
The current enthusiasm for Artificial Intelligence has become the most extravagant single-sector investment boom in American corporate history. With global capital expenditure expected to eclipse $500 billion this year against actual end-customer revenues of perhaps a tenth of that figure, the numbers are frightfully large; the chasm between them is larger still. For equity investors, the question is whether AI will deliver a sufficient return on capital. For fixed-income investors, the question is far simpler: who is funding this staggering outlay, and what breaks when the cash arrives unfashionably late?
This is not, however, an original sort of folly. Carlota Perez’s rather brilliant framework of technological revolutions instructs us that major technologies move through two great phases, conveniently separated by a financial crisis. In the "installation phase," capital insists on funding infrastructure ahead of any actual demand, pricing the novelty on the breathless presumption of what it might eventually achieve. Later, in the "deployment phase," after a crisis has graciously swept away the more excessively enthusiastic participants, the surviving infrastructure is put to productive use. The pattern recurs with the tiresome predictability of the English being prematurely eliminated from the world finals of a sport we ostensibly invented.
Consider the funding. The operating cash flow of the major hyperscalers is no longer sufficient to cover their ruinously extravagant toys. The gap is being papered over by equity issuance, vendor financing, and a remarkable expansion of private credit—a market now asked to finance long-duration assets with deeply impatient capital. These funds boast quarterly redemption provisions that one imagines will be severely tested during any meaningful market unpleasantness. It would be profoundly unwise to be found holding such ill-bred instruments when the music inevitably stops, and the chairs are abruptly removed. The entire edifice rests upon a rather fatal duration mismatch: five-to-seven-year projects funded by investors whose tolerance for delayed gratification is notoriously short.
And then there is the tricky problem of the physical substrate itself. Unlike a nineteenth-century railway, which had the decency to remain useful even after comprehensively bankrupting its original founders, a GPU simply becomes passé in three to five years—the technological equivalent of last season's hat. What actually survives the inevitable crisis is merely the boring infrastructure: the cooling systems, the building shells, and the regulatory permits.
Speaking of power, the intelligent observer must also prepare for the inevitable steepening of the yield curve. When the enthusiasm falters and the cycle breaks, central banks will undoubtedly slash short-term rates in a desperate bid to soothe panicked markets. Yet, the long end of the curve will remain stubbornly elevated, anchored by structural inflation and the exorbitant energy costs required to keep these machines humming. This stickiness is, of course, entirely unhelped by the ongoing skirmishes in Iran, which continue to propel energy prices skyward on the wings of yet another "imminent" and highly publicized peace deal that never quite materializes.
The sensible fixed-income investor avoids the undignified scramble of attempting to divine which specific technology applications will prove transformative. Instead of opining on the winners of a technological pageant one scarcely understands, the relevant questions are far more pragmatic:
How much of the buildout is funded by debt rather than internal cash flow?
How much of that debt depends on refinancing rather than amortization?
What collateral value remains if GPUs depreciate faster than expected?
Which structures offer genuine liquidity, and which merely promise it?
What happens to the yield curve if short rates fall during a risk-off episode while long-end inflation and energy costs remain sticky?
It is far better to maintain a liquidity position for a risk-off event, capture the energy-input cost asymmetry, and prepare for the inevitable issues with the yield curve. The fixed-income investor is not paid to decide which chatbot, algo, or chip wins the pageant. We are paid to judge whether the funding structure can survive a slower path to profitability. In installation phases, that is usually the only question that matters.
This material is for informational and educational purposes only and should not be considered investment advice or a recommendation to buy or sell any security. The author, Ben Ashby, is Chief Investment Officer of Henderson Rowe, an affiliate of Rayliant Investment Research. The opinions expressed are those of the author as of the date of publication, are subject to change without notice, and do not necessarily reflect the opinions of Rayliant Investment Research or its affiliates. Certain statements are forward-looking and reflect the author's views on future market conditions; actual results may differ materially. Investors should consult their financial professional before making any investment decisions.
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.
WEEK AHEAD
June 15-19, 2026
Weekly Market Commentary:
Something is Brewing in the Market
The Data Dump: A Lot of Noise, One Clear Signal
Oracle, Adobe, and the Market's Favorite New Game: "Good Results, Wrong Reaction"
The Main Event: SpaceX Goes Public
The Week Ahead — Kevin Warsh Steps Into the Arena
Perspectives by Ben Ashby
The Frenzy, The Funding, and The Folly
— Saki
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.