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U.S. markets face a pivotal week as Micron Technology earnings on Wednesday test AI chip demand momentum, May PCE inflation on Thursday provides the Fed's preferred price read, and the Strait of Hormuz reopening reshapes the energy and inflation outlook heading into the second half of 2026.

The US-Iran deal to lift the blockade on the Strait of Hormuz has reshaped the macro backdrop entering this week, with oil prices falling and the most immediate upward pressure on energy-driven inflation beginning to ease. Major U.S. stock indexes are hovering near all-time highs, supported by robust corporate earnings driven by the AI investment boom, with the S&P 500 up approximately 8% for the year and the Philadelphia SE Semiconductor Index hitting a record high, up 7% for the week ending June 19.

Micron Technology's quarterly results on Wednesday will check the pulse of chip demand and determine whether the surge in data centre spending and semiconductor profits can continue to surprise to the upside at a time when valuations are elevated and investors are questioning whether the rally is overextended. Running alongside the AI test is the week's most consequential macro release: May PCE inflation on Thursday, the Federal Reserve's preferred price gauge, arriving in the immediate aftermath of Warsh's first meeting and the Fed's upwardly revised inflation forecasts for 2026.