Market Report, 2026-06-26

Stocks, particularly those tied to the AI investment theme, declined this week even as concerns about the sustainability of infrastructure demand eased following Micron Technology's earnings report, which highlighted substantial margin expansion and strong future sales guidance. Despite this, the market has increasingly priced in pessimistic sentiment over the past several days due to a range of concerns, including the profitability of AI model providers and growing bipartisan backlash over AI-related issues such as data center expansion and deepfake campaigns.

The Dow was the only major index to end the week in positive territory, largely because of its relatively low exposure to chipmakers. The Nasdaq-100 declined 4.13% this week, while the S&P 500 fell 2.33%. The technology, communication services, and consumer discretionary sectors all finished the week significantly lower, with the technology sector posting the largest decline at 5.25%.

The bond market rallied significantly as investors reacted to expectations that the Federal Reserve will maintain a more hawkish stance, helping to temper inflation expectations. The 5-year Treasury yield declined by 10 basis points to 4.13%, while the 10-year Treasury yield fell by 8 basis points to 4.37%.

This week's economic data continued to show persistent inflation, particularly in the core components, which are moving in the opposite direction of what the Federal Reserve would like to see. At the same time, consumers remained resilient, driving stronger real consumer spending and providing the Federal Reserve with additional justification to keep interest rates elevated. Meanwhile, consumer sentiment improved as gasoline prices declined; however, consumers continue to expect the cost of living to remain high, with inflation expectations accelerating.

Looking ahead to next week, ahead of the Fourth of July holiday weekend, we will receive key employment and industry reports. Adams Wealth Advisors will be back with further updates. Enjoy your weekend.