Last week, investors shifted money away from AI mega-caps toward cyclical sectors and smaller companies. Inflation is proving stubborn, and U.S.-Iran tensions aren’t helping, putting upward pressure on energy prices and hardening the Fed’s resolve.

 

Here’s how the markets performed, and a look behind what drove the numbers. 

 

 

Stock Index Performance 

• The S&P 500 slipped 1.95%.
• The Nasdaq 100 tumbled 4.24%.
• The Dow Jones Industrial Average edged up 0.60%.

 

What Moved Markets

Inflation Continues to Stick. May’s core Personal Consumption Expenditures (PCE) held at 3.4% year-over-year, well above the Fed’s 2% target and declining only marginally. As a reminder, core PCE reflects the prices paid for goods and services, but it does not account for the prices of goods considered more volatile, such as energy. However, despite a higher PCE, consumer spending still increased, sending a complicated message. All eyes will be on the Fed during July’s meeting to see the central bank’s take on the data.

 

Rates, the Dollar, and Commodities. The 10-year Treasury yield edged below 4.40%, but monetary policy is staying restrictive. The dollar hit a 13-month high on rate-hike expectations and a flight from riskier assets. Brent crude oil swung sharply, briefly touching four-month lows on hopes for progress in U.S.-Iran talks before reversing course after a new U.S. strike on Iranian targets. Gold held above $4,000 an ounce on geopolitical anxiety and inflation doubts.

 

Micron Posts an Impressive Quarter. Micron, a leading producer of computer memory and data storage products, posted fiscal third-quarter revenue that surged more than fourfold to over $41 billion, driven by increasing demand for AI infrastructure. The stock dropped double digits ahead of the report, then surged more than 15% on the results. This surge in revenue indicates that AI and AI-related companies do not seem to be slowing their growth.

 

 

The Week Ahead

Fresh data this week will put the higher-for-longer rate story to the test. Key releases include the ISM Manufacturing report on Wednesday, July 1; weekly jobless claims on Thursday, July 2; and the ISM Services report on Monday, July 6. Together, they will offer a clearer read on whether price pressures are easing and growth is holding up under restrictive policy.

 

As a reminder, the U.S. stock market will be closed on Friday, July 3, 2026, in observance of Independence Day.

 

 

 

 

This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website, www.adviserinfo.sec.gov. Past performance is not a guarantee of future results.