The S&P 500 closed Thursday at 7,483.23, up 1.8% on the week, while the Nasdaq rose 2.1% during the same period. According to reports from Investing.com India, memory chip stocks experienced a sharp pullback last week, with shares of Micron Technology Inc closing Thursday at $975.56, down 22.3% from its intra-day high of $1,255.00. This follows a pattern similar to March when a blowout earnings report sent shares to a high before a sharp pullback. Markets are now entering a week marked by continued structural shift away from AI and technology stocks toward healthcare and defensive sectors, reflecting persistent investor skepticism about technology valuations and artificial intelligence infrastructure spending sustainability. The tech sector rotation that intensified through June shows no signs of reversing despite brief stabilization attempts, with healthcare demonstrating relative outperformance as investors seek earnings visibility and dividend stability over speculative growth narratives.
June's FOMC meeting minutes released Wednesday revealed a Federal Reserve that has moved decisively away from its prior easing bias, with officials now openly debating whether, and when, rates may need to rise again. As reported by Investing.com India, "a few participants" saw a case for raising the target range, and "several" questioned whether current policy is restrictive enough, marking a significant shift from the dovish stance that had dominated recent meetings. The minutes repeatedly highlighted AI-related demand as a source of stronger investment, higher electricity use, and upward pressure on technology prices, with officials expressing concerns about persistent inflation risks. Even President Trump may have to give up on his hopes for a near-term interest rate cut after today's hawkish minutes from the June FOMC meeting. Fed funds futures now imply 1.5 rate hikes over the next 12 months, marking a sharp reversal from the deep rate cut pricing that dominated the past three years. The CME FedWatch Tool now prices roughly a 50% to 55% chance of a September hike, down from 66% before a weaker-than-expected June jobs report.
US ISM Services PMI scheduled for Monday will establish the first major growth signal of the week, measuring business activity across the services sector which accounts for the majority of economic output. According to Investing.com India, June's ISM Services PMI should remain in expansion territory, providing an early signal for markets entering the week. June's NY Fed survey of inflation expectations is due Tuesday, with its one-year-ahead measure at 3.5% in May and the three-year-ahead measure lower at 3.1%. The Eurozone PPI is scheduled for Monday to open the week's international data, while Japan's PPI accelerated to 6.3% year-over-year in May, the fastest pace since 2023. Initial unemployment insurance claims for the week of June 26 held at 215,000, maintaining a 4-week average of 222,000, both within the range of the past two years. The committee met before the Bureau of Labor Statistics released its June payrolls report, which showed just 57,000 new jobs - the weakest reading in four months. Any hawkish language in the minutes reflects a labor market that still looked solid at the time, though the softer picture came days later.
Brent oil prices rose to $76 per barrel on Wednesday, marking an increase of over 6% for the week, creating additional uncertainty for Federal Reserve policy decisions. As reported by The Financial Express, this fresh round of US attacks on Iran is pushing oil prices higher and stoking inflation concerns, potentially derailing plans for rate cuts. The latest job market data shows that the US Fed may have to resort to a rate cut ahead, however, with this oil price spike, that plan could be derailed. The unemployment rate fell to 4.2% from 4.3%, largely due to a decrease in the participation rate to 61.5% from 61.8%, indicating worker disengagement. Nine of 18 FOMC policymakers penciled in at least one 2026 hike at the time of the June meeting, but the situation may have changed after the weaker jobs data. Warsh has acknowledged uncertainty around both inflation and job data when it comes to any rate hike or rate cut decision, with the US CPI for June 2026 scheduled for release on July 14, 2026, at 8:30 AM Eastern Time.
The Nasdaq 100 continues to consolidate around the 30,000 level that has acted as a magnet for price over the last two months, according to technical analysis from Investing.com India. The index is threatening to break below a 1-month symmetrical triangle pattern, though stocks have recovered off intraday lows as President Trump tones down escalation fears around Iran. The near-term bias in the Nasdaq 100 remains neutral, with potential for a dip back toward the early June lows in the lower-28K range depending on economic data and geopolitical headlines. Only a break below that floor would shift the longer-term bias in favor of a deeper pullback. For traders, the biggest takeaway is that FOMC policymakers are split between scenarios where persistent inflation requires additional near-term interest rate hikes and scenarios where inflation gradually fades and rates can eventually decline (though not likely until 2027 at the earliest). Strong data may once again be treated as "bad news" for risk assets if it keeps inflation risks alive, a key dynamic to consider heading into next week's highly-anticipated US CPI report.
