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Key areas of focus
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Earnings season kicks off in full force this week as some of the Big Banks begin reporting. The macro calendar is equally packed. The focus will be on Tuesday's June CPI print, followed by Retail Sales, Industrial Production, and Housing Starts, alongside a fresh Philly Fed regional business sentiment survey and a University of Michigan Consumer Sentiment reading.
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Oil prices and yields climbed Tuesday and Wednesday as an escalation in the Middle East reinforced the fragility of the U.S.–Iran ceasefire. U.S. crude briefly reached about $76 before easing back toward $71 by Friday afternoon. The move also sent yields to their highest level since mid-May amid ongoing inflation concerns.
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Interestingly, an index tracking investors' expectations of short-term U.S. volatility fell for the second consecutive week, slipping to its lowest level in more than six months. The Cboe Volatility Index (VIX) finished at 15.0, down meaningfully from a recent high of 22.2 reached on June 10.
Week in review
Markets ended the week modestly higher despite a volatile AI trade and escalating tensions in the Middle East that pushed oil and yields higher. Monday opened on a positive note, supported by a constructive ISM Services print that came in within expectations. The underlying composition was mixed, with softer new orders and activity offset by stronger employment. Tuesday's tone shifted meaningfully, with AI infrastructure names leading declines as investors digested Samsung's pre-earnings guidance. The stock fell sharply, pulling memory stocks lower alongside it. Wednesday extended the equity weakness more broadly, as higher yields and oil prices, which were fueled by renewed tensions in the Middle East, weighed on sentiment. June FOMC minutes showed unanimous support for holding rates, with most officials open to additional tightening if inflation stays elevated. Thursday stabilized, with jobless claims in line with expectations and existing home sales down 2.4%. Housing is still struggling with stubbornly high mortgage rates. With no major macro releases on Friday, equities finished the week slightly higher.
Spotlight
The FOMC released their meeting minutes from the June 16–17 meeting on Wednesday. This was Kevin Warsh's first meeting as Fed Chair. Despite the unanimous decision to hold rates steady, the committee struck a decidedly more hawkish tone than markets had expected. The tone shifted particularly meaningfully on inflation. Officials no longer viewed it as a passing energy shock. They believed that these inflationary pressures had broadened into transportation, airfares, petrochemicals, and agricultural inputs, driven by tariffs, Strait of Hormuz disruptions, and robust AI-related demand. A majority voiced concern that five years above the 2% target could begin to feed into expectations, and nearly all agreed that some additional tightening would be warranted if inflation remains sticky. The committee remained split on the year-end rate. The dot plot narrowly tilted toward one hike as nine of eighteen officials favored an increase. The statement also dropped its prior easing language, signaling that policy will be guided by incoming information.
Markets
Sectors
Style & Market Cap
Sources
1. ISM Services
Institute for Supply Management, Institute for Supply Management (ISM) Purchasing Managers Index (PMI) Services Report, retrieved from ISM, https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/services/june/
2. Jobless Claims
U.S. Department of Labor, Unemployment Insurance Weekly Claims, retrieved from U.S. Department of Labor; https://www.dol.gov/ui/data.pdf
3. Existing Home Sales
National Association of REALTORS (NAR), Existing-Home Sales Summary, retrieved from NAR; https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
4. FOMC Meeting Minutes, June16-17, 2026
The Federal Reserve Board, Minutes of the Federal Open Market Committee, June 16-17, 2026, retrieved from Board of Governors of the Federal Reserve System; https://www.federalreserve.gov/newsevents/pressreleases/monetary20260708a.htm
Market Data
Morningstar Direct using Morningstar Indices
Authors:
Anthony Silva, CFA®
Senior Director of Strategy Management
World Investment Advisors, LLC