Story Oil Markets

Big Oil Profits Surge, Chip Stocks Slide, and Satellite Internet Rattles Telecom Giants

S&P Futures were trading at 7,557 on a shortened July 4th session, up roughly a third of a percent — surface calm obscuring meaningful sector rotations. Beneath the index level, two of the semiconductor sector's prominent names were under significant pressure. Broadcom has dropped approximately 25 percent from its early June record high after reports emerged that a key AI customer — widely understood to be one of the major technology companies — is developing its own custom chip rather than continuing to purchase Broadcom's components. The vertical integration risk has always shadowed the picks-and-shovels AI infrastructure thesis: when your customers are trillion-dollar technology companies with enormous engineering capacity, their decision to build in-house is a credible and accelerating threat.

Micron dropped 15 percent over two days, with active litigation and a short position taken by investor Michael Burry — who famously shorted the housing market before 2008 — drawing attention to the stock. Burry's calls command disproportionate market attention given his track record, though not all of his positions have proven correct, and the litigation risk is likely the more concrete near-term factor. US stock funds recorded their largest outflows in three months, and Bank of America issued a correction warning, suggesting institutional investors are increasing caution heading into the second half of 2026.

AT&T and Verizon are each heading toward their worst week in years, driven by SpaceX's expanding satellite internet footprint. The traditional telecom model rests on the assumption that wireline and cellular infrastructure hold geographic reach advantages over satellite — an assumption that is eroding faster than the carriers' capital allocation plans anticipated as Starlink accelerates subscriber additions and pushes deeper into enterprise and government contracts.

Big Oil occupies an unusual political position this July 4th. Exxon and Chevron are each expected to more than triple their first-quarter earnings in upcoming reports — the strongest sector profit performance since 2022 — while President Trump publicly demands that oil companies lower gas prices. The administration has delivered expanded drilling access and reduced regulation; the companies have delivered record profits rather than lower consumer prices. Iran's 58-million-barrel floating crude stockpile is directly relevant: if a US-Iran nuclear deal materializes and those barrels re-enter global markets, oil prices move meaningfully downward — which is what Trump says he wants, but which would simultaneously compress the profit margins he has politically protected. Marianne Lake's departure from JPMorgan with a reported $50 million package after being passed over for the CEO role she was widely expected to receive marks the exit of one of the most respected executives in banking. A New York court ruling that remote workers who relocated out of the state during the pandemic still owe New York income tax — based on where their employer is headquartered rather than where they physically worked — carries significant financial implications for potentially hundreds of thousands of workers, and other high-tax states are watching the legal theory closely.