Key Takeaways
- Intel (INTC) shares surged 10% following reports that Nvidia (NVDA) and Google (GOOGL) are considering the company as a backup chip manufacturer.
- Strait of Hormuz transit remains critical, with only 8 total transits recorded between June 5–7, prompting JPMorgan to warn of a potential oil crisis if the blockage persists past June.
- Iran has canceled all flights until further notice, while Israeli Prime Minister Netanyahu reportedly instructed the army to halt preparations for an immediate attack on Iran.
- Google (GOOGL) has placed a massive order with Intel for over three million Tensor Processing Units (TPUs) for delivery in 2028.
- U.S. consumer sentiment is shifting as egg prices hit a 10-year low, while concerns regarding the labor market reached a three-year high.
Tech Giants Pivot to Intel Foundry Services
Intel (INTC) saw its stock price jump 10% today following a report from The Information detailing a significant shift in the semiconductor supply chain. Nvidia (NVDA) is reportedly evaluating Intel’s 18A process and advanced packaging for its future chips as it seeks to diversify its manufacturing partners.
In a major win for Intel’s foundry ambitions, Google (GOOGL) has reportedly placed an order for more than three million Tensor Processing Units (TPUs) to be manufactured by Intel in 2028. This move suggests that the world’s largest tech firms are increasingly viewing Intel as a viable backup to industry leader TSMC.
Middle East Tensions and the Hormuz Blockage
Geopolitical instability in the Middle East has reached a critical juncture, with Iran canceling all flights until further notice. Data from Kpler indicates that the Strait of Hormuz is seeing historically low traffic, with only 8 commercial and non-commercial transits monitored between June 5 and June 7.
JPMorgan issued a caution to investors, stating that a full-scale oil crisis could be imminent if the strait remains blocked past the end of June. While Pakistan Prime Minister Shehbaz Sharif urged for "peace and diplomacy," reports emerged that Israeli Prime Minister Netanyahu has instructed the IDF to halt preparations for a retaliatory strike on Iran, offering a brief window for de-escalation.
Economic Shifts: Labor Worries and Food Deflation
The U.S. labor market is showing signs of cooling as the share of Americans who view jobs as "plentiful" fell to a three-year low. This growing anxiety comes despite some relief in the agricultural sector, where egg prices have plummeted to a 10-year low, providing a rare reprieve from years of food inflation.
However, the agricultural sector faces new risks as the USDA confirmed two new cases of flesh-eating screwworm in Texas. This outbreak is raising significant concerns for livestock producers, as the spread of the parasite could threaten regional meat supplies and increase production costs.
Corporate and Market Briefs
Oppenheimer analysts raised their price target for Oracle (ORCL) to $275 from $235, citing strong growth prospects. Meanwhile, the Italian Economy Ministry acknowledged recent movements regarding the bank Monte dei Paschi di Siena (MPS), noting they recognize the inherent value of the institution.
In international diplomacy, the U.S. has submitted a draft resolution at the IAEA demanding that Iran provide transparency regarding its uranium stocks and nuclear sites. Market participants remain on high alert as the intersection of semiconductor supply shifts and energy security continues to drive volatility.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.