Chartstopper: June 26, 2026

This Week

Equity markets and bond markets had different focuses this week.

For equities, it's been increased concern about the AI trade – both the path to profitability (the AI hyperscalers are down about 5% this week) and the fact that strong AI-related demand for memory and storage is leading some companies to raise prices on consumer goods. Even the mega cap Micron reporting that its profits are up nearly 15x YOY only reversed the slide temporarily.

Bond markets, however, appear more focused on inflation.

Headline PCE inflation rose to 4.1% YOY in May, representing a three-year high and more than double the Federal Reserve’s 2% target. But, with shipping through the Strait of Hormuz ramping up (despite an attack on a ship yesterday), oil prices are back to pre-conflict levels and down 20% this month. This suggests that headline inflation is likely to slow soon.

Given this, markets are now pricing 30 basis points (bp) in Fed hikes this year, which is down from 43bp at the start of the week.

So, bond markets and equities moved in different directions this week, with 10-year Treasury yields down nearly 10bp to move below 4.4%, while the Nasdaq-100 Index® is down 4%.

Next Week

Here are the top events I’m watching next week:

• Tuesday: JOLTS Job Openings (May), Consumer Confidence (Jun.)
• Wednesday: ISM Manufacturing PMI (Jun.), ADP Private Sector Jobs (Jun.)
• Thursday: Nonfarm Payrolls (Jun.), Jobless Claims (Jun. 27)