Weekly Wrap

The major averages turned in a mixed performance during a volatile week that was shaped by sharp swings in both oil prices and semiconductor stocks. The S&P 500 gained 1.2% and the Nasdaq Composite advanced 1.7%, supported by renewed leadership from mega-cap technology stocks, while the DJIA slipped 0.5% as economically sensitive and industrial-heavy components struggled with rising energy prices and geopolitical uncertainty. The AI trade remained firmly in focus as investors repeatedly bought weakness across semiconductor stocks despite bouts of profit-taking, while geopolitical developments surrounding Iran drove significant day-to-day rotations across the broader market.

Technology leadership ultimately remained intact, even if the path was anything but smooth. The information technology sector rose 3.4% for the week as the PHLX Semiconductor Index gained 2.7%, though the group experienced several sharp reversals. Those pullbacks repeatedly attracted buyers, with optimism surrounding the long-term AI investment cycle reinforced by favorable developments for companies including NVIDIA, Broadcom, AMD, and Applied Materials. The week's resilience also extended beyond semiconductors, as the Vanguard Mega Cap Growth ETF gained 2.4%, supported by continued strength in several of the market's largest technology companies.

The communication services sector (+2.3%) also outperformed, led by another strong week for Meta Platforms as investors continued warming to the company's expanding AI strategy and infrastructure investments. Reports highlighting opportunities to monetize excess computing capacity, the launch of its Muse Image model, and continued enthusiasm surrounding its AI product roadmap helped Meta finish among the week's top-performing S&P 500 components.

Away from technology, the market spent much of the week responding to developments in the Middle East. Reports of attacks on commercial ships in the Strait of Hormuz, renewed military action between the U.S. and Iran, and subsequent diplomatic developments produced sharp swings in crude oil prices, with WTI briefly climbing above $73 per barrel before retreating into the week's close. Those moves drove significant day-to-day rotations across cyclical sectors. Energy finished with a 3.2% weekly gain, while the industrials (-1.1%) and materials (-2.2%) sectors lagged as higher fuel costs periodically pressured transportation, construction, and packaging-related companies. Although oil prices eased later in the week, those sectors still finished in negative territory, contributing to the DJIA's weekly decline.

Economic data played a secondary role to geopolitical developments, though it continued to reinforce the view of a resilient economy. Services activity remained in expansion territory, weekly jobless claims stayed near historically low levels, and Treasury auctions were generally well received despite yields moving higher over the course of the week. Meanwhile, the June FOMC minutes reaffirmed the Fed's data-dependent approach, with policymakers continuing to acknowledge persistent inflation pressures and uncertainty surrounding the outlook rather than signaling any meaningful shift in policy expectations.

Overall, the week's trading reinforced the market's willingness to look through short-term volatility. Sharp swings in oil prices and continued turbulence across semiconductor stocks created frequent rotations beneath the surface, yet investors repeatedly returned to favored AI-related technology names, allowing the S&P 500 and Nasdaq Composite to advance even as the more cyclical DJIA finished lower. With second-quarter earnings season set to begin next week alongside another round of inflation data, the market's ability to remain near record highs suggests investors remain focused on the longer-term earnings and AI investment story.

• Nasdaq Composite: +1.7% week-to-date
• S&P 500: +1.2% week-to-date
• DJIA: -0.5% week-to-date
• Russell 2000: -0.5% week-to-date
• S&P Mid Cap 400: -0.5% week-to-date

Monday:

The major averages moved in a relatively stable range in their first session back from the long holiday weekend, with the Nasdaq Composite (+1.1%) and S&P 500 (+0.7%) buoyed by continued strength across mega-cap stocks and a rebound in semiconductor names today. That momentum helped the S&P 500 close above the 7,500 mark for the first time since June 18. The DJIA (+0.3%) notched a more modest gain as there was some rotational selling across more defensive pockets of the market amid the outperformance in tech, though it was enough for the index to secure all-time highs and close above the 53,000 mark for the first time.

Today's rebound across semiconductor stocks was widely attributed to investors buying last week's pullback rather than any single industry-specific catalyst. There were still a few news items of note, with Advanced Micro Devices (AMD 552.05, +34.23, +6.61%) outperforming after Goldman Sachs reiterated its Buy rating on the stock and increased its target price to $640 from $450, while Broadcom (AVGO 373.90, +13.45, +3.73%) and Apple (AAPL 312.66, +4.03, +1.31%) agreed to expand their long-standing technology collaboration through 2031. The PHLX Semiconductor Index advanced 2.2%, helping the top-weighted information technology sector (+1.3%) finish as one of the top-performing S&P 500 sectors.

Only the communication services sector (+1.6%) notched a wider gain, with Meta Platforms (META 600.29, +17.39, +2.98%) and Alphabet (GOOG 364.90, +8.72, +2.45%) charting session highs this afternoon to offset broader weakness in the sector.

Tesla (TSLA 419.77, +26.32, +6.69%) was another mega-cap standout, reclaiming nearly all of Friday's loss and pushing the consumer discretionary sector (+1.0%) higher despite weakness across most of the sector. Specialty stores such as O'Reilly Auto (ORLY 84.24, -6.01, -6.66%) and AutoZone (AZO 2957.71, -201.57, -6.38%) were the worst-performing S&P 500 components today.

In total, the Vanguard Mega Cap Growth ETF gained 1.5%, and the market-weighted S&P 500 (+0.7%) outperformed the S&P 500 Equal Weighted Index (flat).

Performance across other cyclical sectors was mixed, with the financials (+0.9%) and industrials (+0.8%) sectors posting solid gains while the energy (-0.3%) and materials (-0.2%) sectors faced modest retreats.

Meanwhile, the defensive health care (+1.2%), utilities (-1.1%), and consumer staples (-0.9%) sectors lagged as investors rotated back into mega-cap tech and semiconductor names today. The real estate sector (-0.9%) faced a similar retreat.

Outside the S&P 500, the Russell 2000 (+0.5%) and S&P Mid Cap 400 (+0.4%) notched decent gains after underperforming last week.

All told, the stock market returned from the holiday weekend on solid footing, with continued strength across technology helping the major averages push through several notable round-number milestones. While those gains came at the expense of some more defensive areas of the market, overall breadth remained decidedly positive, with analysts characterizing the rotation beneath the surface as a healthy feature of the ongoing bull market.

U.S. Treasuries began the week on a mixed, but largely quiet note, with the long bond recording its fourth consecutive loss while the 5-year note yield and shorter tenors climbed for the second day in a row. The 2-year note yield settled down two basis points to 4.12%, and the 10-year note yield settled down one basis point to 4.48%.

Reviewing today's data:

• June S&P Global U.S. Services PMI - Final 51.2; Prior 51.3
• June ISM Non-Manufacturing Index 54.0% (Briefing.com consensus 54.2%); Prior 54.5%
  • The key takeaway from the report is that activity in the services sector is still running at a good pace despite ongoing price pressures. The June reading was 0.9 percentage points above the 12-month average of 53.1%.

Tuesday:

The major averages finished lower today, slipping back toward their session lows as semiconductor weakness and rising oil prices weighed on sentiment. The S&P 500 (-0.5%), Nasdaq Composite (-1.2%), and DJIA (-0.3%) all ended lower, while the Russell 2000 (-0.9%) and S&P Mid Cap 400 (-1.2%) faced even sharper losses.

Semiconductor stocks remained under pressure after Samsung Electronics' preliminary second-quarter results sparked renewed profit-taking across the group. While Samsung reported operating profit that was more than 1,800% higher than a year ago, revenue came in just shy of elevated expectations, reinforcing concerns that much of the optimism surrounding the semiconductor industry may already be reflected in valuations.

The PHLX Semiconductor Index fell 4.7%, as names such as Teradyne (TER 343.11, -36.41, -9.59%) and Intel (INTC 110.39, -11.81, -9.66%) were among the worst-performing S&P 500 components. The weakness weighed heavily on the information technology sector (-1.6%), though losses were not uniform across mega-cap technology.

NVIDIA (NVDA 196.93, +1.38, +0.71%) managed to finish higher, but the Vanguard Mega Cap Growth ETF still declined 0.9%, reflecting broader pressure across several large growth names.

The industrials sector (-1.7%) also lagged as electrical equipment names including Generac (GNRC 235.76, -22.05, -8.55%) continued to move in tandem with semiconductor stocks.

The consumer discretionary sector (-0.4%) finished lower as Tesla (TSLA 402.90, -16.87, -4.02%) fell sharply, while cruise lines and other oil- and rate-sensitive stocks came under pressure amid the surge in oil prices.

The energy sector (+3.0%) was the clear standout as geopolitical tensions pushed crude oil sharply higher. Crude oil futures settled today's session $1.93 higher (+2.8%) at $70.48 per barrel following reports of attacks on three separate ships in the Strait of Hormuz. Oil prices continued to climb after the settlement after CNBC reported, citing a U.S. official, that the Treasury Department is revoking the waiver allowing Iran to sell its oil in response to the strikes.

The communication services sector (+0.6%) was another relative bright spot, supported by broad gains across its components. Meta Platforms (META 615.58, +15.29, +2.55%) was a mega-cap standout after announcing the release of Muse Image, the first image generation model from Meta Superintelligence Labs.

Defensive sectors continued to hold up relatively well, with the health care (+1.6%), utilities (+0.9%), consumer staples (+1.0%), and real estate (+1.5%) sectors maintaining much of their midday strength as investors rotated away from semiconductor stocks.

Today's session reflected a somewhat more cautious tone than was evident earlier in the day. Semiconductor stocks remained the primary source of pressure, while the late-day surge in oil prices added another headwind for smaller-cap stocks and other economically sensitive areas of the market.

Even so, the broader market once again benefited from rotational buying, allowing the S&P 500 to close above the 7,500 level (7,503.85) after spending much of the session below that key technical mark. That resilience has become a defining theme to start the month, with the S&P 500 up 0.1% since the beginning of July despite the PHLX Semiconductor Index falling 13.7% over the same period, underscoring that strength elsewhere in the market continues to offset the semiconductor group's pullback.

U.S. Treasuries retreated on Tuesday, giving back their slim gains from the start of the week and finishing on lows even though the Treasury launched this week's note and bond auction slate with a solid $58 billion 3-year note sale. The 2-year note yield settled up four basis points to 4.16%, and the 10-year note yield settled up five basis points to 4.53%.

Reviewing today's data:

• May Trade Balance -$77.6 bln (Briefing.com consensus -$78.8 bln); Prior was revised to -$54.6 bln from -$55.9 bln
  • The key takeaway from the report is that it reflected stronger demand for goods in the U.S. versus elsewhere, evidenced by the wide gap between exports and imports in May.

Wednesday:

The major averages finished mixed as renewed hostilities between the U.S. and Iran sent oil prices sharply higher, pressuring much of the market while an afternoon rebound in semiconductor stocks helped offset some of the weakness. The S&P 500 (-0.3%) closed modestly lower, while the DJIA (-1.1%) lagged amid broad cyclical weakness. The Nasdaq Composite (+0.2%) bucked the trend, climbing back into positive territory as strength across large-cap technology stocks softened the impact of the oil-driven selloff.

The U.S. struck Iranian targets in response to attacks on commercial ships in the Strait of Hormuz, prompting President Trump to declare the ceasefire effectively over and threaten additional strikes. Crude oil futures settled $3.05 higher (+4.3%) at $73.53 per barrel after being up more than 6% earlier in the session.

The surge in oil prices pressured much of the market outside of energy and technology. The materials sector (-2.5%) posted the steepest decline, with packaging companies such as Smurfit Westrock plc (SW 42.08, -2.92, -6.49%) moving lower as higher energy costs threatened margins. Sherwin-Williams (SHW 330.57, -11.69, -3.42%) was also a notable laggard, contributing to the DJIA's underperformance.

The consumer discretionary sector (-1.6%) followed close behind as travel-related stocks, couriers, and homebuilders retreated amid the surge in oil prices and Treasury yields. The iShares U.S. Home Construction ETF retreated 4.0%.

The financials (-1.9%), communication services (-1.4%), and rate-sensitive real estate (-1.6%) sectors also underperformed, while the consumer staples sector (-0.3%) held up relatively well.

Unsurprisingly, the energy sector (+1.5%) finished atop the leaderboard, though it pared stronger gains from earlier in the session after President Trump said any developments involving Iran would be resolved quickly, including any impact on oil prices, and reiterated that he does not expect the conflict to restart.

The information technology sector (+1.4%) provided an important counterweight as semiconductor stocks strengthened into the close. The PHLX Semiconductor Index climbed 2.2%, helping the market-weighted S&P 500 (-0.3%) considerably outperform the S&P 500 Equal Weight Index (-1.2%).

NVIDIA (NVDA 204.08, +7.15, +3.63%) outperformed after reports that China will allow limited H200 chip purchases for select AI firms, while Broadcom (AVGO 388.69, +17.91, +4.83%) advanced after Apple (AAPL 313.28, +2.62, +0.84%) expanded its multiyear U.S. supply agreement for wireless-connectivity components and custom silicon. Akamai Tech (AKAM 126.57, +12.20, +10.67%) was the top-performing S&P 500 stock after being selected as a strategic security partner for World Wide Technology's AI infrastructure initiative, reinforcing its expanding role in enterprise AI security deployments.

On the policy front, investors also digested the June FOMC minutes, which reinforced the Fed's data-dependent approach while acknowledging persistent inflation pressures and uncertainty tied to geopolitical developments. Participants continued to emphasize that future policy decisions will depend on incoming economic data, while noting that markets have shifted toward expecting fewer rate cuts over the coming year.

Although the surge in oil prices weighed broadly on equities, today's action ultimately did little to alter the market's recent leadership trends. Buy-the-dip interest emerged across semiconductor stocks following yesterday's sharp retreat, while favorable corporate developments involving NVIDIA and Broadcom helped cushion the major indices even as higher oil prices continued to pressure much of the broader market.

U.S. Treasuries faced another round of selling on Wednesday, which drove yields on 5-year note and shorter tenors back to their highest settlement levels of the year while yields on 10-year and 30-year remained below their May highs. The U.S. Treasury followed yesterday's good 3-year note offering with another solid 10-year note reopening ahead of tomorrow's 30-year bond reopening. The 2-year note yield settled up four basis points to 4.20%, and the 10-year note yield settled up four basis points to 4.57%. 

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.2%; Prior 0.0%
• May Wholesale Inventories 0.1% (Briefing.com consensus 0.3%); Prior 0.6%
• Consumer credit decreased by $200 mln in May (Briefing.com consensus $18.9 bln) after increasing by a revised $20.8 bln (from $20.7 bln) in April. Revolving credit decreased by $5.3 bln while nonrevolving credit increased by $5.1 bln.

Thursday:

The major averages finished higher as investors rotated back into semiconductor stocks while easing oil prices helped support economically sensitive areas of the market following yesterday's geopolitical-driven selloff. The Nasdaq Composite (+1.3%) led the advance as chipmakers rallied throughout the session, while the S&P 500 (+0.8%) also climbed into the close. The DJIA (+0.3%) posted a more modest gain, reflecting some weakness among several defensive-oriented sectors.

The information technology sector (+1.8%) led the market, supported by a 3.1% gain in the PHLX Semiconductor Index. Nikkei reported that Applied Materials (AMAT 588.66, +18.16, +3.18%) CEO Gary Dickerson said chipmakers are preparing for years of expansion, reinforcing optimism surrounding AI-related capital spending as investors continued buying yesterday's dip.

Memory stocks received an additional boost after Reuters reported that SK Hynix's upcoming U.S. ADS offering is more than seven times oversubscribed, highlighting continued institutional enthusiasm for AI-related semiconductor names. Leadership remained concentrated in memory stocks such as Micron (MU 991.64, +42.84, +4.52%) and Sandisk (SNDK 1857.37, +130.19, +7.54%), semiconductor equipment companies including Lam Research (LRCX 353.17, +20.02, +6.01%), and AI compute and networking names such as Advanced Micro Devices (AMD 546.72, +29.32, +5.67%), suggesting investors continue to favor the highest-conviction AI beneficiaries.

Outside of technology, easing energy prices provided a more supportive backdrop for cyclical sectors. WTI crude oil futures settled down $1.43 (-1.9%) at $72.10 per barrel despite continued exchanges of fire between the U.S. and Iran, helping Treasury yields retreat from yesterday's highs.

The consumer discretionary sector (+1.2%) strengthened into the afternoon, led by cruise operators such as Norwegian Cruise Line (NCLH 19.76, +1.29, +6.98%), while Tesla (TSLA 406.55, +12.49, +3.17%) rebounded sharply from yesterday's weakness.

The industrials sector (+0.4%) also benefited, with trucking companies, including FedEx Freight (FDXF 154.25, +10.95, +7.64%), and airlines contributing to the advance.

The financials (+1.0%) remained among the day's strongest performers as investors continued to buy yesterday's weakness.

Today's retreat in oil prices weighed on the energy sector (-1.6%), while defensive-oriented groups also underperformed amid the renewed appetite for technology stocks. The consumer staples sector (-1.8%) finished as the weakest S&P 500 sector after Costco (COST 912.97, -40.16, -4.21%) declined on softer June comparable sales growth and PepsiCo (PEP 137.86, -4.65, -3.26%) fell despite a narrow earnings beat as its North America results disappointed. The utilities (-0.6%) and health care (-0.1%) sectors also finished lower.

Outside of the S&P 500, the Russell 2000 (+1.2%) and S&P Mid Cap 400 (+1.2%) both rebounded nicely from yesterday's weakness, reflecting a broad improvement in sentiment as oil prices and Treasury yields retreated.

Today's session marked a reversal of several themes that dominated yesterday's trading. While easing oil prices helped broaden participation across portions of the market, semiconductor stocks once again provided the clearest leadership as investors looked past ongoing geopolitical tensions and renewed their focus on the long-term AI investment cycle.

U.S. Treasuries snapped their two-day skid on Thursday, spending the session in a steady bounce off their opening lows. The daylong rally received some intraday support from a strong $22 billion 30-year bond sale, which made for a good finish to this week's trifecta of solid auctions. The 2-year note yield settled down four basis points to 4.16%, and the 10-year note yield settled down three basis points to 4.54%.

Reviewing today's data:

• Weekly Initial Claims 215K (Briefing.com consensus 220K); Prior was revised to 217K from 215K, Weekly Continuing Claims 1.814 mln; Prior was revised to 1.806 mln from 1.814 mln
  • The key takeaway from the report is the same key takeaway as other recent reports: the low level of initial jobless claims continues to reinforce the understanding that layoff activity remains quite low overall.
• June Existing Home Sales 4.09 mln (Briefing.com consensus 4.20 mln); Prior was revised to 4.19 mln from 4.17 mln
  • The key takeaway from the report is that affordability conditions improved across all regions as wage growth outpaced home price growth; however, overall sales were still pressured by high prices and elevated mortgage rates.

Friday:

The major averages finished near their best levels of the session following a relatively quiet day of trading, with easing oil prices helping the market look past geopolitical volatility and support equities after a volatile week marked by sharp swings in semiconductor stocks and crude oil. The S&P 500 (+0.4%), Nasdaq Composite (+0.3%), and DJIA (+0.3%) all closed higher. The S&P 500 and Nasdaq Composite also finished firmly higher for the week, while the DJIA ended modestly lower.

Markets briefly turned lower during the morning after President Trump said the U.S. would continue talks with Iran while declaring the ceasefire over. Sentiment steadied after Axios reported that the U.S. and Iran are expected to hold another round of talks in Switzerland next week, while Bloomberg reported that oil tankers continue to transit the Strait of Hormuz despite ongoing tensions. WTI crude oil futures settled down $0.69 (-1.0%) at $71.41 per barrel.

The retreat in oil prices supported broad participation across the market, with 10 S&P 500 sectors finishing higher. The materials sector (+1.1%) led the advance as container and packaging companies benefited from easing energy costs, while the decline in crude also helped keep broader market volatility subdued.

The communication services sector (+0.9%) was another standout thanks to Meta Platforms (META 669.21, +37.73, +5.97%), which finished as the best-performing S&P 500 component. Investors continued to warm to the company's AI strategy following a series of product and infrastructure announcements, including reports that it may monetize surplus computing capacity and expand its AI infrastructure, reinforcing confidence that its elevated AI spending can evolve from a margin headwind into a meaningful long-term growth opportunity.

The information technology sector (+0.6%) also strengthened into the close despite relatively muted action across semiconductor stocks, with the PHLX Semiconductor Index finishing little changed (+0.1%). NVIDIA (NVDA 210.96, +8.18, +4.03%) nevertheless was a standout%, extending a strong weekly advance.

While not a component of the S&P 500, SK hynix Inc.'s (SKHYV 168.31, +19.31, +12.96%) Nasdaq ADS enjoyed a strong U.S. debut, reinforcing investor appetite for one of the AI industry's leading high-bandwidth memory suppliers.

The health care sector (-0.8%) was the lone sector to finish lower, weighed down by continued weakness in Moderna (MRNA 68.27, -8.29, -10.83%), which ended as the worst-performing S&P 500 component.

On the earnings front, Delta Air Lines (DAL 87.39, -1.61, -1.81%) also declined despite delivering better-than-feared quarterly results and reaffirming its full-year outlook, suggesting investors remain cautious about the pace of the airline industry's earnings recovery even as the company pointed to improving demand.

Although today's session lacked the sharp rotations seen earlier in the week, it capped a constructive stretch for equities as investors largely looked past the latest geopolitical developments. Attention now shifts to next week's start of second-quarter earnings season, with the major banks set to report first, along with another round of inflation data that could help shape expectations for monetary policy. With the market continuing to trade near record highs, corporate guidance is likely to be just as important as the quarterly results themselves.

There was no economic data of note.

U.S. Treasuries finished a bumpy week on a lower note with yields on 5-year note and shorter tenors settling just below this year's highs. The 2-year note yield settled up five basis points to 4.21% (+7 basis points this week), and the 10-year note yield settled up three basis points to 4.57% (+8 basis points this week).