<p>SG Morning Brief | Memory Stocks Crash 10% as Hardware-to-Software Rotation Accelerates; Payrolls Tonight</p><h2 id="1xdh7y1kl">US Overnight</h2><p>The S&amp;P 500 slipped 0.19% and the Dow held flat on the first trading day of H2 2026, but beneath the surface was a violent rotation. The Nasdaq 100 fell 1.5%, dragged down by a rare double-digit selloff in AI memory stocks. Micron plunged 10.57% and SanDisk dropped 10.62% as the &#34;pick-and-shovel&#34; trade that defined Q2 reversed course. Funds rotated into software stocks, which rallied as the market reassessed where value lies in the AI stack. The divergence — S&amp;P barely down while memory names lost a tenth of their value — shows capital moving within tech, not leaving it. A class-action lawsuit filed in California alleging Samsung, SK Hynix, and Micron illegally coordinated to restrict DRAM supply and inflate prices added a legal overhang. Citrini Research warned that memory prices have risen so sharply that hyperscalers and OEMs may reduce their memory needs, softening demand over time. Morgan Stanley maintained overweight ratings on both Micron and SanDisk, framing the selloff as rotation rather than a fundamental collapse.</p><h3 id="qxsa4b5t">Key Movers</h3><p><strong>Micron (MU) -10.57%</strong> — Micron fell 10.57%, its worst day since the KOSPI crash on June 23, erasing roughly $110 billion in market cap. The stock closed near $1,061, roughly flat with its level just before last week's blowout earnings. The decline reflects the &#34;Memory Paradox&#34; playing out in reverse: the same pricing power that produced $41.46 billion in Q3 revenue is now raising fears of demand destruction as Apple, Microsoft, and hyperscaler customers push back on costs.</p><p><strong>SanDisk (SNDK) -10.62%</strong> — SanDisk fell 10.62% in lockstep with Micron, continuing its pattern as the highest-beta name in the memory complex. The stock swings violently in both directions — it gained 21% on June 25, fell 13% on June 23, and now drops 10.6% again. Despite the selloff, SanDisk remains up over 800% year-to-date.</p><h2 id="osv2qs9sr">SGX Preview</h2><p>The STI was near 5,070. DBS near S$62.18, UOB near S$37.91. The memory selloff may weigh on Venture Corp and local tech names, but the rotation into software suggests the broader AI trade is evolving rather than dying. Tonight's June nonfarm payrolls (moved to Thursday due to Friday's early close for July 4) will set the tone for Asian markets Friday morning. A strong print supports the rate hike case; a soft print revives rate cut hopes.</p><h2 id="izsw20ii">Asia Pre-Market</h2><p>Futures data was not yet available. The memory selloff is the dominant theme, but the S&amp;P's minimal decline (-0.19%) suggests the damage is contained to one sub-sector. Gold dropped below $4,000 for the first time in seven months during Wednesday's session, reflecting the unwinding of war premium and inflation hedges. Oil remains near $70-73.</p><h2 id="3gvxcw6s3">Today's US Earnings and Economic Calendar</h2><figure class="table"><table><thead><tr><th>Event</th><th>Time (ET)</th><th>Time (UTC+8)</th></tr></thead><tbody><tr><td><strong>June Nonfarm Payrolls</strong></td><td><strong>8:30 AM</strong></td><td><strong>8:30 PM</strong></td></tr><tr><td><strong>Unemployment Rate</strong></td><td><strong>8:30 AM</strong></td><td><strong>8:30 PM</strong></td></tr><tr><td>ISM Services PMI (Jun)</td><td>10:00 AM</td><td>10:00 PM</td></tr></tbody></table></figure><p>Friday July 3: markets close early (Independence Day). Monday July 7: <strong>SpaceX joins Nasdaq-100.</strong></p><p><strong>Data Spotlight: June Nonfarm Payrolls</strong> — May payrolls came in at 172,000, roughly double consensus, which sent the Nasdaq down 4.18% on June 5 in a &#34;good news is bad news&#34; reaction. Since then, the Iran ceasefire, oil crashing from $95 to $70, and Michigan 5Y inflation expectations plunging to 3.3% have shifted the backdrop. A strong print tonight would test whether the market can absorb good economic news now that oil has fallen 34%. A weak print could extend the hardware-to-software rotation as lower rates favor growth names over cyclicals. Fed Governor Waller's recent warning that three-month average payroll creation has slowed to 48,000 sets the bar low — anything above 150,000 is a beat.</p><h2 id="nyx4r6gsq">One More Thing</h2><p>Micron and SanDisk each losing 10% on the first day of Q3 after the SOX's best quarter in history tells you everything about how this market processes success. Q2 delivered 88% returns for the semiconductor index. The reward for that performance is a valuation so stretched that any catalyst — a lawsuit, a research note, a whiff of demand softening — triggers a stampede. The memory supercycle is not over. Micron's HBM is fully sold out through 2027 and it just guided Q4 to $50 billion. But the market is telling you that the easy money has been made. The trade from here is harder: stock-picking within AI, not buying the entire basket. That is what the hardware-to-software rotation means. Welcome to H2.</p><p><i>This briefing is for informational purposes only and does not constitute investment advice.</i></p>

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SNDK

<p>US OvernightThe S&P 500 slipped 0.19% and the Dow held flat on the first trading day of H2 2026, but beneath the surface was a violent rotation. The Nasdaq 100 fell 1.5%, dragged down by a rare double-digit selloff in AI memory stocks. Micron plunged 10.57% and SanDisk dropped 10.62% as the "pick-and-shovel" trade that defined Q2 reversed course.</p>

- The S&P 500 dipped 0.19% while AI memory stocks like Micron and SanDisk experienced significant selloffs of over 10% as market funds rotated into software stocks.  
- A class-action lawsuit alleging illegal supply restrictions by major memory manufacturers may exacerbate these market movements, alongside concerns about slowing demand from hyperscalers and OEMs.  
- Tonight's U.S. nonfarm payrolls report could influence market sentiment, with a strong figure supporting rate hikes, while a weak print might extend the hardware-to-software asset rotation.

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SG Morning Brief | Memory Stocks Crash 10% as Hardware-to-Software Rotation Accelerates; Payrolls Tonight