June 27, 2026, Market Update
Market Recap: So Far, So Good in 2026
Tech stocks remained under pressure this week, with AI and semiconductor companies leading the market lower. Outside of large-cap technology, however, market performance was generally more resilient, as investors continued rotating into small-cap, value, dividend-paying and international stocks. As discussed further below, the broader participation in this year's rally is an encouraging sign and suggests the market's advance has become less dependent on a small number of companies.
Bond prices moved modestly higher during the week as Treasury yields edged lower following inflation data that was largely in line with expectations. While investors continue to monitor the possibility of Federal Reserve rate increases later this year, inflation has not accelerated meaningfully in recent weeks, providing some support for fixed-income markets.
Looking ahead, investors will be watching to see whether market leadership continues to broaden beyond the technology sector. The June employment report on Thursday will likely receive the greatest attention, while ADP employment data, weekly jobless claims, and manufacturing surveys will provide additional insight into the strength of the economy.
Market Performance
Market Commentary: Make Hay When The Sun Shines
The stock market appears to be on much firmer footing than it was just a few months ago. Until recently, the ongoing rally had been driven almost exclusively by a handful of technology giants, but that script appears to be changing, as a wide range of asset classes have posted strong returns so far this year. For example:
- Small caps (IWM) +21.5%
- Mid-caps (VO) +10.7%
- Value stocks (VTV) +15.0%
- International Stocks (VXUS) +12.6 %
- REITs (VNQ) +13.7%
- Dividend stocks (VYM) +11.6%
This broadening of market participation is consistent with a more stable rally.
Another positive development is that the risk of inflation-driven interest rate has diminished. Consumer prices have risen by 4.2.% annually in 2026 and Federal Reserve officials have suggested that rate hikes may be necessary if that trend continues. However, if the Strait of Hormuz remains open and energy prices stay contained, inflation pressures should ease, reducing the likelihood that the Federal Reserve will raise interest rates.
While two big threats to the stock market rally have lessened, that’s not to say that the coast is clear. Stock prices are still near record highs, inflation remains well above the Federal Reserve's target, and geopolitical events can change the outlook in an instant. For investors who expect to raise cash soon, the current market strength could present an opportune moment to do so.
In Case You Missed It
Marine traffic data shows a dramatic surge in shipping activity through the Strait of Hormuz. Outbound vessel traffic through the strategic bottleneck doubled in a single 24-hour window following a landmark 60-day interim agreement between the U.S. and Iran and the price of a barrel of oil tumbled to around $69.47 per barrel on Friday, wiping out the massive price spikes that hit after the conflict broke out in late February.