NEW YORK, June 27, 2026, 13:01 (EDT)
- Dow added 0.6% and the Russell 2000 was up 1% for the week, but the S&P 500 dropped 2%. The Nasdaq lost 4.6%.
- U.S. equity funds lost $3.53 billion in outflows for the week ending June 24, with tech funds seeing almost $20 billion withdrawn.
- June payrolls data out Thursday may shift rate-hike expectations just ahead of U.S. markets closing Friday, July 3, for Independence Day.
U.S. stock markets stayed closed Saturday, so investors looked back on a mixed week. The S&P 500 ended down, but Friday’s internals pointed higher. Advancers led decliners in the S&P 500 by 1.8-1, with 35 stocks notching new highs and only five setting new lows. On the Nasdaq, 263 stocks hit highs while 169 hit lows. Overall U.S. trading volume ran to 30.1 billion shares, topping the 20-day average of 23.1 billion.
Chip stocks pulled the market down, but it was the heavyweights, not the numbers, that mattered. The PHLX semiconductor index dropped 5.3% Friday and slid 7.9% for the week, the steepest weekly loss since early April. The S&P 500 slipped 0.05%, finishing at 7,353.95. The Nasdaq closed 0.24% lower at 25,297.62. The Dow lost 0.09% and ended at 51,876.11. “It’s too early to conclude that there’s a major correction brewing in tech,” said David Stubbs, chief investment strategist at AlphaCore Wealth Advisory. He noted that questions about AI profit and capital spending “are certainly not going away.” Reuters
This matters for investors since index exposure is still driven by the biggest stocks. Owning a broad index doesn’t give much relief if AI-linked stocks drop, and a portfolio can end up moving like a chip trade.
This week, trading had a feel that favored stock pickers. Apple NASDAQ:AAPL climbed 3.1% Friday, recovering from earlier losses tied to higher iPad and MacBook prices. Moderna NASDAQ:MRNA was up almost 13% after presenting to investors. ON Semiconductor NASDAQ:ON tumbled nearly 24% after it said it would buy Synaptics NASDAQ:SYNA in an all-stock deal for about $7 billion.
Outflows ramped up as $3.53 billion left U.S. equity funds for the week ending June 24, LSEG Lipper figures reported by Reuters showed. That unwound part of the $37.63 billion net inflow from the previous week. Tech sector funds saw redemptions hit nearly $20 billion, after taking in $21.46 billion the week before.
Rates are back in focus. May PCE inflation came in at 4.1% year over year, above the 4% mark for the first time since April 2023. Core PCE hit 3.4%. “PCE price inflation remains too high and will keep the Fed on hold and mulling a potential rate hike at upcoming meetings,” said Scott Anderson, chief U.S. economist at BMO Capital Markets. Reuters
Economists are sounding less hawkish than markets. More than three-quarters in a June 23-25 Reuters poll expect the federal funds rate to stick at 3.50%-3.75% through 2026. “At the moment, holding rather than hiking is the most appropriate stance,” said Josh Hirt, senior U.S. economist at Vanguard. Bank of America’s Stephen Juneau said the Fed’s latest projections were “a materially hawkish surprise.” Reuters
Jobs data lands Thursday, the main event this week. Forecasts from a Reuters poll call for June payrolls to rise by 110,000, after climbing 172,000 in May. “If we do get a really good jobs number, my guess is the market’s not going to treat that as good news,” said Doug Huber, deputy chief investment officer at Wealth Enhancement. Reuters
Jobs data is also moving tech stocks. “The flavor of tech leadership for the last two months has been semiconductor-related names,” said Julia Hermann, global market strategist at New York Life Investment Management. The key issue now, she said, is whether higher rates could hit “the more cyclical and volatile component of market leadership at play.” Reuters
University of Michigan’s final June sentiment index bumped up to 49.5 from 44.8 in May, but that didn’t give bulls much. Joanne Hsu, who runs the Surveys of Consumers, said “over half of consumers” saw high prices as hurting their personal finances for the third month in a row. One-year inflation expectations ticked down to 4.6% from 4.8%. Reuters
Markets are open only four days this week. U.S. exchanges shut on Friday for Independence Day. Nike NYSE:NKE reports earnings, before the busier Q2 season starts later in July.
