SpaceX Shares Drop for Third Straight Day, Apple Price Hikes Coming Soon

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Monday, June 22nd. In today's episode, we'll break down Kevin Warsh's first Fed meeting and why Wall Street is calling it a new era for the Federal Reserve. We'll also tell you why your next iPhone could cost $1,300 and why SpaceX stock is falling for the third straight day. Then stick around to the end of the show to find out why Hollywood is having a resurgence at the box office. We got a great show for you today.
Let's go.
The market is coming off a short but winning week. The S&P 500 was up nearly 1% while the NASDAQ surged 2.4%.
You know, it was kind of a wild end to the week. Markets tanked on Wednesday following the Fed meeting, but then rallied on Thursday following the signing of the Memorandum of Understanding with Iran to pause hostilities for 60 days and reopen the Strait of Hormuz. We're gonna talk more about the Fed meeting in a bit, but let's talk more about Iran first. With the Memorandum signed, traffic through the Strait of Hormuz picked up and Brent Crew dropped about 8% on the week to around $80 a barrel. On top of that, the average price of gas in America fell below $4 a gallon for the first time since March. So that's some good news for consumers, but keep in mind, this deal from last week was just preliminary and the final deal is currently being negotiated. Over the weekend, the US and Iran began talks at a resort in Switzerland, and things already got a bit messy. President Trump threatened Iran with strikes on social media over the weekend. Iran then threatened to suspend the talks in Switzerland, and at one point, Iran said that it had closed the Strait of Hormuz again. But it looks like things have gotten ironed out and are back on track with Iran's foreign minister saying there was major progress after all night negotiations. So progress is being made, but this deal is still very fragile. But look, even with all the optimism around the Iran deal, the market still has some real risks beneath the surface. Now valuations are stretched, interest rates are still high, and the AI trade right now is carrying a lot of weight right now. And to me, the biggest red flag is that companies are flooding the stock market with new shares right now. Obviously SpaceX just had their monster $86 billion IPO a few days ago. Not to mention Google had an $85 billion stock sale a few weeks ago. And here's an interesting stat. According to the Wall Street Journal, this is the first time since 2021 that US companies as a whole are selling more new stock than they're buying back. No, typically companies buy back their own shares to help their stock price. That's not happening right now. The last two times that more shares were issued and bought back was right before the.com crash and right before the 2022 sell off. So like I said, it's a red flag and it's something that's making me a bit nervous. Looking ahead to this week, we are getting earnings from FedEx on Tuesday and Micron on Wednesday. And then on Thursday, we're getting the PCE inflation report, which is the Fed's preferred measure of inflation. So if you're new here, it's a great time to get subscribed to the podcast and tune in every day to stay in the loop.
Let's run through some headlines, starting with the Federal Reserve. Last Wednesday, new Fed Chair, Kevin Warsh, held his first Fed meeting and it was an eventful one. Now the Fed held interest rates steady at 3.5% to 3.75%, which is what Wall Street expected. But everything else from the meeting was a surprise. In the press conference, Kevin Warsh came out way more hawkish than the market expected. Remember, President Trump picked Kevin Warsh partly because he was expected to be more open to lowering interest rates, but that's not the vibe he gave in his press conference. Warsh said the committee was unambiguously and unanimously committed to bringing inflation down, which was a bit of a shock to the market. The market is now pricing in a roughly 50% chance of a rate increase by September. According to the DOT plot, about half of Fed officials now project at least one rate hike this year. Back in March, zero officials had penciled in a rate hike. But beyond interest rates, Kevin Warsh is also trying to remake the entire Fed. He launched five task forces to review how the Fed communicates, how it measures inflation, how it handles a balance sheet, and even how it thinks about AI's impact on the economy. And the big one for me is that he also hinted at the press conference that happens after every Fed meeting, which is something that his predecessor, Jerome Powell started, could also get scrapped. Basically his whole message to the market was that the Fed is going to talk less, which is funny because the entire financial industry is built around parsing every syllable from the Fed like it's a Taylor Swift lyric. So yeah, big changes could be coming to the Fed over the next few months. And I don't know if the markets will like it. Now, since we're on the topic of the Fed, we got breaking news this morning. Former Fed Chair Alan Greenspan passed away at the age of 100 Alan Greenspan ran the Fed from 1987 to 2006, and he's one of the most influential central bankers in modern history. I mean, I gotta say, he does have that iconic look with the giant glasses and the smoke pipe in his hand. Let's shift gears and talk about Apple. Apple CEO Tim Cook said in an interview with the Wall Street Journal last week that Apple is going to start raising prices on its products, and he's blaming the rising costs of memory and storage. See, every iPhone, Mac and iPad has RAM and a hard drive in it, and these components have gotten insanely expensive because of AI. All these AI data centers being built with tons of memory and storage, which is leading to a supply crunch, and prices of memory chips have quadrupled in the last year. Now, Apple had been absorbing those cost increases to keep prices stable for consumers, but Tim Cook says that's no longer sustainable. Apple still has to keep their 40 plus percent profit margins to not upset their shareholders. Now, Tim Cook didn't say exactly how much more the next iPhone will cost when it comes out in September. Some estimates say the next iPhone Pro could start at $1,300, which is a $200 increase from the current iPhone Pro. But look, Apple is not the only one when it comes to price hikes, Dell, HP, Nintendo and Sony have all raised prices on their products because of the memory shortages. And you know, big picture here, it's easy to see why many people have a negative view on AI. Not only is it leading to anxiety about jobs being replaced, but it also is making our electronics more expensive. Let's talk about some stocks making moves today.