It’s sometimes hard to remember there’s anything driving the market apart from artificial intelligence. But investors should look beyond AI darling Micron Technology when assessing the health of the U.S. economy this week. 

Micron is likely to put up stunning numbers when it reports after the market closes Wednesday. Incredible demand for memory chips is likely to mean revenue nearly quadrupling and earnings growing at an even sharper pace. A strong report could give the AI-driven tech rally another boost. 

But what’s good news for Micron isn’t necessarily positive for the wider economy. Soaring memory costs are driving up prices of smartphones, PCs, and other goods—even Apple is feeling the pinch. It’s an effect that might turn up in May’s personal consumption expenditures report on Thursday. The core PCE, which excludes volatile food and energy prices, is expected to rise at a 0.4% monthly rate, compared with 0.2% in April. Watch the durable goods component for evidence of rising hardware costs. 

Further clues about how inflation is affecting American consumers might come from shipping giant FedEx and cruise operator Carnival, both set to post results on Tuesday. FedEx volumes are a bellwether for the economy as a whole, although figures could be messy in the first report since the spinoff of the FedEx Freight business. Carnival could give an indication on how soon the tentative U.S.-Iran peace deal can lead to relief on fuel costs and travel-spending trends. 

FedEx and Carnival aren’t likely to rack up 800% gains like Micron has over the past 12 months. But investors need to be wary of assuming traditionally cyclical businesses such as memory chips can sustain the market ever. A little bit of consumer cheer alongside the AI exhilaration wouldn’t go amiss.

—Adam Clark

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The talks between the U.S. and Iran faced a potential complication after negotiators convened in Switzerland to hammer out a permanent deal. Word from the Iranian side suggested its leaders weren’t happy with President Donald Trump’s threats to renew bombing if Iran doesn’t curb activity by Hezbollah.

• Qatar and Pakistan announced that the U.S. and Iran had agreed to a mechanism to ensure the termination of military operations in Lebanon during talks in Switzerland, in a joint statement early Monday. They added that a line of communication had been formed to avoid incidents and miscommunication and allow the safe passage of commercial vessels through the Strait of Hormuz.

• Some reports over the weekend said the talks stalled because of Trump’s threat, while others said talks had taken a break but were still expected to continue.

• Trump said on his own social-media platform Sunday that he would “hit Iran very hard again” if Iran’s proxies in Lebanon weren’t stopped from causing trouble. He told Fox News the U.S. may have to take over the Strait of Hormuz, which Iran said it shut down on Saturday.

• Energy Secretary Chris Wright said 67 ships went through the strait on Saturday, with oil and oil product volumes about equal to where things stood before the war. Wright told ABC News there are three channels through the strait, and one needs to be cleared of mines.

What’s Next: Oil prices were falling to start the week but they remain volatile as tensions between the U.S. and Iran appear fraught. Still, as of Monday, Brent crude, the international benchmark, was up about 30% for the year.

—Liz Moyer, Abby Schultz and Callum Keown

Home buyers are coming back—at least in some rising hot spots. But while buyers and sellers are back at the table in some markets, others are still locked in place. A seasonally adjusted index tracking contract signings rose in May to its highest level this year, but the landscape isn’t uniform.

• Nationally, home buyers and sellers in May struck the most tentative deals since November, according to the National Association of Realtors. Even with above-6% mortgage rates, that buyer rush indicates pent-up demand, NAR’s chief economist Lawrence Yun said. Consumers may see rates as a new normal.

• In the Northeast, where inventory is low, there has been faster home price growth but slower home sales for several months, but now it is showing more buyer contract signings, Yun noted. In the south, contract signings remained higher than other regions—but the improvement compared with last year was muted.

• Pending sales in the west are most challenged. In Arizona’s greater Phoenix area, “it just feels like it’s the spring that didn’t happen,” says DeLex Realty’s Wendy Herst. Single-family houses in May spent 73 days on the market, according to data published by Phoenix Realtors.

• Contract signings in the West saw a modest 1.2% increase from a year ago, the slightest of all four regions tracked by the NAR, and the national trend higher could continue. If last week’s retreat in the 10-year Treasury yield holds, mortgage rates could drift lower.

What’s Next: The hope for lower mortgage rates sent the stocks of home builders higher. The iShares U.S. Home Construction exchange-traded fund reached its highest close since April. It is up nearly 11% over the past 12 months.

—Shaina Mishkin

European quantum computing leader IQM is on the verge of its biggest milestone yet. But first Real Asset Acquisition Corp. shareholders have to approve a merger with the Finnish company. If they do, it would be the first time a European quantum company trades on a major U.S. exchange.

• IQM has sold 23 gate-based machines, making it a leader in on-premises system sales, ahead of IBM, whose massive fleet of quantum computers is primarily accessible only over the cloud. IQM has also started making sales in the data-center market.

• In April, Poland’s Galaxy Systemy Informatyczne became the first private company to purchase an IQM computer. IQM CEO Jan Goetz told Barron’s he believes pairing the company’s superconducting quantum technology with classical processors will not only speed up the time to solution, but cut power consumption.

• In the long term, quantum systems are expected to live alongside classical processors in data centers to solve complex problems. While IQM has experienced early success, the system is still taking shape. Like other pure plays, IQM has yet to turn a yearly profit and continues to burn through cash.

• To offset these losses, IQM is leaning on a familiar quantum-sector playbook: a blank-check merger, which usually guarantees a faster route to the public market and much-needed capital. Listing on the Nasdaq is also IQM’s play for a U.S. presence. 

What’s Next: All signs point to Real Asset Acquisition shareholders approving the transaction. Institutional investors have shown confidence in the deal; in June, strong demand pushed the private investment in public equity commitment to $146 million from an original $134 million.

—Mackenzie Tatananni

Walt Disney and Pixar Animation Studios’ Toy Story 5 shattered already enormous expectations over the holiday weekend, notching the biggest movie debut of the year and continuing this year’s brisk summer movie momentum. Overall box office sales for the weekend were estimated at $230 million.

• For Toy Story 5, domestic ticket sales of $160 million came in at the high end of expectations, including $71 million on Friday’s Juneteenth holiday, and easily surpassed the $131.7 million that Universal Pictures and Nintendo’s The Super Mario Galaxy Movie generated in April.

• For Hollywood, the estimated $1.82 billion in summer domestic box office sales through Sunday is 15.2% ahead of last summer and only 1.9% below 2019. The estimated $4.46 billion in domestic box office sales so far this year are 14.2% higher than last year.

• Toy Story 5, made on a $250 million budget that doesn’t include marketing, is widely expected to outsell Toy Story 3 and Toy Story 4, which each sold about $1.07 billion worldwide. That doesn’t include revenue from toys, theater concessions, and LeapFrog’s Toy Story-themed tablet Lilypad.

• The 11.2 million people who saw Toy Story 5 constituted 69% of the national foot traffic and 97% of the premium foot traffic, meaning those who saw it on IMAX and premium large-format screens, according to EntTelligence. Audience members skewed female (64%).

What’s Next: There’s still a packed calendar of film debuts ahead. Warner Bros.’ Supergirl premieres Friday, while Universal’s Minions & Monsters opens July 1). Universal’s The Odyssey and Sony Pictures’ Spider-Man: Brand New Day are also slated for July.

—Janet H. Cho