Monthly Outlook: Micron, Warsh, CSL

The S&P 500 and the tech-focused Nasdaq index ended May at all-time highs following reports of a 60-day ceasefire deal between Iran and the US, while Australia's S&P/ASX 200 delivered a modest 0.8% monthly gain.

June is shaping up as a month of excitement and potential clarity. Memory chipmaker Micron [MU:US] has seized attention with a near vertical run that has lifted the stock 250% in 2026 and carried it into the trillion-dollar club, leaving investors to weigh whether the rally can sustain itself or finally cool. Focus will also turn to the Federal Open Market Committee (FOMC) meeting, where new Federal Reserve (Fed) chair Kevin Warsh will offer early signals on his approach to interest rates and inflation. At home, bargain hunters of blue-chip CSL [CSL] will be watching for signs that the battered stock has finally found a floor.

Micron goes vertical

While the month's most anticipated launch is still waiting on the pad, another name commanding attention across the CMC Invest community has already cleared the tower. Micron lifted off in spectacular fashion through May, and some CMC Invest clients have been climbing aboard.

For months, Micron had been bordering CMC Invest's top 10 most-traded US stocks. It nudged up to 8th by trade count in April before surging to 2nd place in May, trailing only NVIDIA. In surging to second place, it broke the grip that Tesla [TSLA:US] and Microsoft [MSFT:US] had held on the position for much of the past year. Sentiment skewed firmly bullish, with around 70% of May orders on the buy side, though there was still healthy two-way trading at these levels. The theme ran deeper, too. More broadly, the Roundhill Memory ETF [DRAM:US] climbed to the 13th most-traded US security on the platform in May, up from 121st a month earlier.

The performance backs up the enthusiasm. Micron is up roughly 250% year-to-date, the fourth-best performer across the entire S&P 500 and Nasdaq 100. Tellingly, every top name on that leaderboard sits somewhere in the hardware stack that builds, connects, stores and powers AI systems:

Top-performing US stocks by YTD return (S&P 500 and Nasdaq 100)

^{Source: TradingView, 2 June 2026}

Micron's surge pushed it past US$1tn, making it the fastest stock in history to double from US$500bn to US$1tn, in just 48 trading days. Driving it all is unprecedented demand for high-bandwidth memory (HBM), the specialised chips that feed AI model training and data centres. Supply has effectively sold out, letting Micron lift prices and margins sharply.

So how do you make sense of a rally this steep? Oddly, on some measures Micron still looks cheap. Its price-to-earnings ratio, or what investors pay for each dollar of profit, remains relatively low because earnings have surged alongside the share price. The catch is that memory chips are a famously boom-and-bust business. A low multiple built on peak-cycle profits can quickly become expensive if AI capex slows, competition intensifies (Samsung and SK Hynix are also scaling HBM), or supply catches up.

Today's "cheapness" assumes the boom not only continues, but that this cycle is structurally different from past ones. That view appears to be being priced in aggressively.

The professionals are split, too. TipRanks data shows analysts are overwhelmingly positive (27 buys, 3 holds, no sells), yet their average price target of around US$981 sits below the current US$1,035, with individual targets running from US$400 to US$1,750. When forecasts are that far apart, it points to a clear lack of consensus among the experts about what comes next.

At the same time, the demand story behind the move appears genuine, at least for now, with HBM supply sold out and pricing power firmly intact. When a chart goes near vertical, it becomes hard to hold a high-conviction view in either direction. June shapes up as the test of whether the rally keeps its momentum or cools from here. Either way, it is a name worth watching as a barometer of the broader AI rally, which has been the primary contributor to overall returns in recent months. (For a refresher on the memory trade, see CMC's January Outlook, Silver, Memory, Clarity.)

Warsh takes the hot seat

The US interest rate story has changed dramatically since January. What began as a year widely expected to extend Fed rate cuts has turned into a debate about whether the US central bank will need to raise rates in 2026.

The reason is inflation that simply will not cool down. The Fed's preferred inflation gauge, known as core PCE, rose 3.3% in the year to April, still well above its 2% goal. The broader measure, which includes food and energy, climbed even faster at 3.8%, the quickest pace in about three years. In plain terms, prices are proving stickier than the Fed would like, which makes cutting rates much harder to justify.

That stubborn inflation is showing up in the bond market. When investors worry about inflation, they demand higher returns to lend money to the US government, and those returns, known as yields, have been climbing. Since the Iran conflict began on 28 February, the yield on 10-year US government bonds has risen from 3.95% to as high as 4.48%, while the 30-year yield has pushed above 5.2%, its highest since 2007.

Why does this matter for everyday investors? Because government bonds are about the safest place to park money, and when they start paying more, shares look relatively less attractive by comparison. As Goldman Sachs strategist Peter Oppenheimer put it, higher yields mean investors are paid less for taking on the extra risk of owning shares, which can tempt money out of the stock market and into bonds. He noted that sharp jumps in yields have often coincided with falls in share prices.

So far, the US stock markets have been supported by strong earnings growth and continued AI infrastructure-related capital spending. The gains have concentrated in companies that directly benefit from the AI infrastructure buildout.

The gap between the VanEck Semiconductor [SMH:US] 65% year-to-date gain and Magnificent Seven’s [MAGS:US] rise of just 6.5% in the same period also suggests that this cycle prefers AI beneficiaries to AI spenders.

All eyes now turn to the 16-17 June FOMC meeting, the first chaired by Kevin Warsh, who succeeded Jerome Powell earlier this year. Markets widely expect rates to hold at 3.5% to 3.75%, but the decision itself may matter less than what Warsh says.

Having publicly advocated for lower rates as recently as December 2025, Warsh’s dovish reputation faces its first real test. The market will be listening closely for signals on his stance on interest rates.

President Trump has already made his preference clear, telling an audience in New York in May, “We are going to get the rates down … I had a rotten head of the Fed, and now I have a great head of the Fed today, Kevin Warsh.”

According to CME’s FedWatch Tool, the probability of a 25 basis point rate hike remains negligible in June, before climbing to 6.1% for July and further to 37.9% for December.

But the truth of the matter is that the macro environment remains volatile and fluid as the headlines in the Middle East continue to drive the narrative.

On 28 May, reports of a potential 60-day ceasefire extension between the US and Iran offered some relief. Uncertainties remain, however, as Reuters reported that Tehran has not agreed to two key conditions: the complete opening of the Strait of Hormuz and an end to its nuclear weapon developments.

Whatever the outcome, James Smith, developed markets economist at ING Think, warned that an Iran deal “probably wouldn’t change much” at the Fed and that central banks are likely to stay hawkish for now.

For investors, June’s FOMC meeting is more of a temperature check than a turning point. The rate decision is largely pre-determined, but Warsh’s tone will set expectations for the second half of 2026. Still, the elephant in the room remains the Iran war. An end to the conflict would go a long way towards easing pressure on policymakers, investors and consumers.

Can CSL find a floor?

CSL [CSL], once one of Australia’s most dependable market favourites, has fallen a long way from the pedestal investors once placed it on.

Since the start of 2025, the biotech giant has shed a staggering $90bn in market value. In 2026 alone, CSL’s share price has declined by 44% following a challenging period that included earnings guidance cuts, a delayed spinoff of its vaccine division, top management shakeup and one of the biggest write-downs in Australian corporate history.

By the end of May, the stock was trading at more than nine-year lows of A$96.61, compared to the all-time high of $342 hit in February 2020.

The decline has been swift. In our last check-in on CSL late last year, the stock was trading around A$200.

While the share price reflects deep pessimism, many CMC Invest clients have not been deterred. CSL was the platform's most-traded individual stock in May, sitting 5th overall behind only four broad ETFs (VAS, IVV, VGS and NDQ). With 77% of orders on the buy side, client sentiment was firmly bullish.

From a technical standpoint, CSL remains in deeply oversold territory. For the entirety of May, the stock’s relative strength index stayed below the 30 point mark, a level that historically signals oversold conditions and exhaustion among sellers. Price action has been well below both 50-day and 200-day exponential moving averages ever since the company announced a shock earnings downgrade in February 2026.

With no clear positive catalyst for CSL’s turnaround, buyers appear to be focusing instead on the biotech firm’s historically cheap valuation.

Analyst sentiment reflects the broader uncertainty. TipRanks data on the CMC Invest platform paints a similarly cautious picture, with 11 analyst ratings split between just 3 buys and 8 holds, and 12-month price targets ranging from a low of A$99 to a high of A$230, with an average of A$138.

Jefferies was among those downgrading CSL in May, slashing its price target to A$108 from A$195, citing pricing pressure and competition from generics at its iron deficiency and nephrology medicine unit Vifor. The investment bank also said that a glut of immunoglobulin inventory in US-based hospitals and a slump in albumin (a blood plasma protein) prices in China have stemmed earnings growth at its CSL Behring unit, which contributed 69% of FY 2026 group revenue.

The challenges extend beyond plasma. Declining US immunisation rates have slowed momentum at the Seqirus vaccines unit, contributing to the decision to delay the spinoff.

At such a time, CSL finds itself in the middle of a management crisis. Following Paul McKenzie’s abrupt retirement in February, interim CEO Gordon Naylor, the former head of the vaccine unit, has since ruled himself out as a permanent candidate, leaving a leadership vacuum at the worst possible time.

The road to recovery may be a long one. There is a chance that buyers in May moved too early. If CSL's 18 August earnings result disappoints, the stock could come under renewed pressure.

Buyers appear focused on beaten-down prices for now. Decades of consistent compounding have earned CSL a loyal following, one that has so far proven reluctant to give up on the company despite its recent challenges.

CSL bulls remain convinced that the company can reclaim its status as a rare large cap capable of sustaining double-digit earnings growth. But, times are changing. Increased competition, changing attitudes towards vaccination and the rise of protectionism (China began developing albumin to decrease import reliance in 2025) could mean that the conditions that allowed CSL to thrive in the past may no longer exist.

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