3 Things to Watch in the Stock Market Next Week

Markets will reopen after the Juneteenth holiday weekend into a busy stretch. The Federal Reserve held its benchmark interest rate steady on Wednesday, but a hawkish set of projections pointed to a possible rate increase later this year. And a framework to wind down the U.S. conflict with Iran has pulled oil prices well off their 2026 highs, easing a big inflation worry.

Against that backdrop, the week brings two large earnings reports and a banking release that, in most years (but this year is different), helps determine how much cash the biggest banks can return to shareholders.

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1. FedEx and the health of the global economy

FedEx (NYSE:FDX) reports fiscal fourth-quarter results on Tuesday after the market closes, and it does so as a changed company. On June 1, it completed the spin-off of its less-than-truckload (LTL) freight business into a separate public company, leaving a pure-play parent focused on package and express delivery.

FedEx is worth watching for more than its own numbers. It moves packages and freight for businesses across nearly every industry, which makes its commentary a useful read on where the broader economy is heading.

When FedEx reported in March, its Federal Express segment operating income rose 21% year over year, and management raised its full-year adjusted earnings guidance to a range of $19.30 to $20.10 per share.

The question this time is whether that momentum held through the spring, and what FedEx says about demand for the rest of the year.

There's a competitive dynamic to watch, too. Amazon (NASDAQ:AMZN) recently opened its less-than-truckload shipping service to outside businesses, expanding further into territory FedEx and its rivals have long controlled. At about 17 times earnings, the stock isn't priced for perfection, leaving room to rise if the outlook holds up.

2. Micron and the AI memory boom

Micron Technology (NASDAQ:MU) reports fiscal third-quarter results on Wednesday after the close. The memory chipmaker enters the report near an all-time high, with shares up nearly 300% so far in 2026.

Artificial intelligence (AI), of course, is the tailwind powering Micron's business and, in turn, its stock. Data centers running AI models need enormous amounts of high-bandwidth memory, which Micron makes, and tight supply has sent prices and profits soaring.

In its fiscal second quarter, reported in March, Micron's revenue nearly tripled year over year to a record $23.86 billion, and adjusted earnings per share jumped to $12.20 from $1.56 a year earlier.

And management guided for an even bigger fiscal third quarter, with revenue of about $33.5 billion and adjusted earnings per share of around $19.15.

"In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand," said CEO Sanjay Mehrotra in the company's fiscal second-quarter earnings release.

The stock trades at about 53 times earnings -- a rich multiple that could come down sharply if profits keep climbing the way management expects. Its main risk is cyclicality. The company has historically been prone to gluts after the good times, pressuring pricing.

Wednesday's results and outlook should tell investors whether the current surge still has room to run.

3. The Fed's bank stress test

After the close on Wednesday, the Federal Reserve releases the results of its annual stress test, which assesses whether 32 large banks could continue lending during a severe recession. This year's hypothetical downturn is harsh. It assumes unemployment climbs to 10% and home prices fall 30%, with an even steeper 39% drop in commercial real estate values.

The results carry real weight for bank investors, since they help determine the capital cushion each bank must hold and -- usually -- how much they can return to shareholders. But this year is a bit different. The Fed has said the 2026 results won't change capital requirements, which stay frozen until 2027 while it overhauls its testing models.

Still, the test is a useful checkup on the system that lends to households and businesses. And any bank that stumbles in the test would draw scrutiny. For long-term investors in financials, it's worth a look even if it doesn't move payouts this year.

Which one matters most?

All three of these items will be important to watch this week. But Micron's June 24 earnings report may be the most important thing for investors to tune into. It will give investors visibility into AI demand. And if management's commentary doesn't point to an acceleration, the AI trade could suffer. After all, most AI stocks are priced as if the AI boom is still in its early innings. So, investors will be hoping to confirm this.

The FedEx update will also be important to investors, but less for its own stock than for the economywide signal it provides.

And the financials stress test will also be worth watching, as it can provide valuable insight into the financial fortitude of the biggest banks and hopefully reassure investors.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Micron Technology. The Motley Fool recommends FedEx. The Motley Fool has a disclosure policy.