What’s News in Markets: Memory’s Gold Rush, Oil Slips, Ford Finds a New Lane

SPEAKER_1 (0:00)

This message is brought to you by Nuveen. How would you invest if you knew the future was watching? At Nuveen, this isn't a theoretical question, it's a perspective that comes from navigating 125 years of market cycles, using foresight to innovate and adapt to the changing needs of investors, and remaining steadfast in the pursuit of lasting performance. Nuveen. Invest like the future is watching. Visit nuveen.com/future to learn more.

Investing involves risk, principal loss is possible.

Imani Moise (0:33)

Hey, listeners. It's Saturday, May 30th. I'm Imani Moise for The Wall Street Journal. This is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's dive in.

Stocks continued their historic march higher as Wall Street's appetite for AI showed few signs of slowing. All three major indexes ended the week at record highs, and the S&P has now risen nine consecutive weeks, the longest winning streak since 2023

Investors are paying historically high prices relative to corporate earnings, a dynamic not seen since the dot-com boom. The last time investors were willing to pay these kinds of prices was around the market peak in 2000 So far, investors are still buying. The tech-heavy Nasdaq led the way, rising just under 2.4% for the week. The S&P 500 grew 1.4% and the Dow increased 0.9%.

The AI boom minted two new trillion-dollar companies this week. Shares in memory chip makers Micron and SK Hynex surged nearly 30% and 20%, respectively, to cross the trillion-dollar valuation mark. They're the latest additions. After Samsung joined one of the stock market's most exclusive clubs earlier this month. For years, memory chips were seen as a commodity business, the tech equivalent of selling gasoline. But investors are now treating chips as one of the most precious resources in the AI economy. In fact, the combined value of Samsung, SK Hynex, and Micron now exceeds the market value of the world's three largest oil companies. Every AI model needs enormous amounts of memory to store and move data, creating a global shortage of semiconductors. According to data provider Orne, spot prices for a common AI memory chip known as DDR5 have more than doubled since November. Stock prices have mirrored those gains. Micron shares have tripled since the end of March, helping it become the fastest company to ever go from a $500 billion valuation to a trillion dollar one.

As memory chips become the hottest commodity, oil stocks are getting the cold shoulder. Energy was the worst performing sector in the S&P 500 this week, as crude prices saw their biggest monthly decline since the onset of the pandemic. Reports that Washington and Tehran may be inching toward a possible agreement that would reopen the Strait of Hormuz have traders unwinding bets that the conflict could lead to a prolonged supply shock. Investors have gotten used to whipsawing headlines as tensions in the Middle East drag on, but they still have some impact. The S&P Energy Index fell more than 5% over the week as Brent Crude slid 11% to $92.05 a barrel. But don't cry for oil investors just yet. The conflict in the Middle East sent energy stocks soaring earlier this year, and the S&P Energy Index remains up more than 25% year-to-date.

Ford was one of the week's biggest winners as investors' enthusiasm for a new subsidiary continued to rev up. Shares in the automaker continued to climb nearly 17% this week, following the company's announcement of an energy storage division called Ford Energy earlier this month. After pulling back from the electric vehicle market, Ford is repurposing batteries originally intended for EVs into stationary energy storage systems for AI data centers, power utilities, and industrial customers. One Morgan Stanley analyst recently estimated that the business could eventually be worth $10 billion on its own. Investors see the move as a way for Ford to cash in on the AI frenzy. And that's right at a moment when the auto industry is slogging through an EV slowdown and broader downturn. Automakers are increasingly warning that new car sales could shrink this year. Roughly 1 million potential buyers have left the new car market since the start of the decade. And executives don't expect them back anytime soon, as consumers grapple with high interest rates, stubborn inflation, and elevated gas prices.

Ford is up almost 27% for the year, while rival General Motors has risen by less than 4%.

And now you know What's News in Markets this week. You could read about more stocks that moved on the week's news in our live markets coverage on wsj.com. Today's show was produced by Anthony Bansi with supervising producer Katie Ferguson. I'm Imani Moise. Have a great weekend, and catch you next Saturday.