Capital Markets Dashboard

Major US indices were higher this week, with the S&P and Nasdaq both seeing their strongest weeks since April and the S&P ending at a fresh all-time high. Momentum outperformed again, though semis and memory were up and down through the week.

US stock markets were modestly higher this week, with the S&P 500 and Nasdaq both up for a second-straight week. The AI capex/ROI/monetization narrative was the key focus to this week amid Big Tech earnings. Microsoft Azure growth and guidance were bright spots. Amazon AWS growth was stronger than expected; both stocks saw substantial gains on the week. However, Meta was hit by its latest AI capex ROI concerns as it has yet to demonstrate a path towards monetization, and Apple (which was previously a beneficiary of the AI spending concerns) fell after results with disappointing guidance, cost pressures, and supply shortages.

U.S. markets finished a volatile week in the red as concerns around rising oil prices, higher Treasury yields, AI-related spending pressures, and new tariff announcements weighed on risk assets. Within equities, Energy was the clear leader, gaining several points for the week as Brent crude briefly surged above $100/barrel, while Technology, Communication Services, and especially Consumer Discretionary lagged amid sharp post-earnings declines in large-cap growth stocks including Tesla and Alphabet. In fixed income, bonds were broadly weaker as Treasury yields moved higher, with the 10-year Treasury yield rising, reflecting inflation concerns tied to higher energy prices and growing uncertainty around the Fed’s path. Overall, the week marked a rotation away from growth and into energy and value-oriented areas of the market.

Despite several moving pieces, the market logged solid gains for the shortened week heading into July 4th. Multiple headlines are impacting the market currently, with the momentum unwind in focus again (memory/semis hit by AI Capex pushback), a weak jobs report easing pressure from rate hike fears, the Mag 7 bouncing back after coming under pressure in June (Apple and Meta leading the group), and oil continuing to decline despite continued flare-ups in the Middle East.

Major US equity indices were mixed this week following last week’s higher performance. However, breadth was very positive as the more defensive Dow Jones Industrial Average was higher for the week, and the broadening into small caps continued with a 1.02% positive week for the Russell 2000 index (more on this in the pages below).

Despite Wednesday’s hawkish FOMC takeaways, major market indices were able to notch modest gains in the holiday-shortened week. The AI demand narrative returned to the front and center, with another rally in semiconductors and memory driving the indices higher. Additionally, the US and Iran have signed their initial memorandum of understanding, paving the way for final deal talks to be ironed out as the US blockade has been removed and the Strait of Hormuz starts to reopen. Consumers will notice a slight ease at the pump as crude oil trades down with continued peace talks, with gas prices dipping back to levels last seen at the beginning of the war. As geopolitical tensions shift to the back burner, the market can resume focusing on the impending Q2 earnings season, with Wall Street looking for S&P 500 earnings growth to come in near 22%.