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This Week on Wall Street
Week of June 22, 2026
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Market Commentary
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Stocks closed last week higher even in a holiday-shortened stretch of trading, with the major averages finishing in the green and the Dow setting a record along the way. The more consequential development was unfolding overseas. A peace agreement between the United States and Iran brought an end to the standoff in the Strait of Hormuz, and ships have started moving through the waterway again, though the flow remains below its prewar pace. As the supply threat has eased, crude oil has drifted back toward levels last seen before the conflict began, and prices at the gas pump have followed lower. That easing in energy, together with a calmer geopolitical backdrop, has carried into this week, with futures pointing higher to open. The story is not fully resolved, as the framework still needs to firm into a durable deal, but the tone is markedly different from where it stood a month ago.
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The Federal Reserve met last week and left its benchmark rate unchanged, but the message around the decision marked a clear hawkish turn. It was the first meeting chaired by Kevin Warsh, and the updated projections showed a majority of officials now leaning toward at least one rate increase before the end of the year, a notable shift from the cuts the market had expected earlier in the cycle. Futures responded by pricing in a higher chance of two hikes in 2026. With inflation still running above target, the question has moved from when the Fed might ease to whether it may need to tighten.
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The week ahead brings a steady stream of data without a single dominant headline. Preliminary readings on business activity arrive early in the week through the flash purchasing managers surveys, offering an initial look at how manufacturing and services are holding up midway through the second quarter. The bigger focus comes later, when the final revision to first-quarter growth lands alongside the Fed's preferred inflation gauge. That growth figure is the third and final cut of first-quarter output, which the prior estimate put at a 1.6% annual rate, a step up from the 0.5% pace at the end of last year. With policymakers having just signaled a more cautious stance, the inflation reading will draw particular attention. A final look at consumer sentiment closes out the week.
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One dynamic worth watching this week plays out through the semiconductors. Chipmakers have been the engine of the market's momentum and growth leadership for much of the past year, with names tied to artificial intelligence memory and computing posting some of the largest gains anywhere in the market. Micron sits near the center of that story, and its earnings on Wednesday will offer a fresh read on whether demand for the high-bandwidth memory that feeds AI systems is still outrunning supply. The broader question is one of leadership and breadth. So much of the market's advance has been concentrated in a narrow band of chip and AI-linked stocks that a result from a single bellwether can move sentiment across the whole group. A strong print would reinforce the trade that has carried the indexes higher, while a disappointment would test how much of the rally rests on the same handful of names. Either way, the reaction will say more about the market's appetite for the AI theme than about any one company.
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Chart of the Week
Chip Makers Have Ridden the AI Capex Wave
While hyperscaler returns face investor scrutiny
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The line tracks the share-price performance of a basket of large US hyperscalers (Amazon, Meta, Alphabet, Microsoft and Oracle) against the MSCI USA Semiconductors index, with both starting from the same point in 2022. A falling line means semiconductors are outpacing the hyperscalers, and the trend has been steadily lower for more than three years. Chipmakers have captured an outsized share of the returns from the buildout in AI computing power, while investors have grown more skeptical of the hyperscalers funding much of that spending and have questioned their return on it.
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| Source: Datastream, Goldman Sachs Global Investment Research |
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On the Calendar
Economic Releases This Week
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Monday None
Tuesday S&P Global Flash PMIs (Manufacturing and Services)
Wednesday New Home Sales
Thursday GDP (Third Estimate, Q1), PCE Price Index,
Initial Jobless Claims
Friday Consumer Sentiment (Final)
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Worth Reading
Stories to Start the Week
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| What is Newton? |
▼ 0–8
▬ 9–13
▲ 14–20
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Our Newton model determines the highest probability of future price direction using advanced algorithmic and high-order mathematical techniques on the current market environment. It scores securities over multiple time periods on a 0–20 scale (0 worst, 20 best). Trend and level both matter. A name moving from 18 to 16 still signals a strong level, with slight exhaustion in the trend.
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| Equities |
TREND |
THIS WK |
LAST WK |
| Emerging Markets | ▲ | 15 | 9 |
| Small Cap | ▬ | 13 | 16 |
| Mid Cap | ▬ | 13 | 15 |
| Large Cap | ▬ | 12 | 7 |
| Foreign Developed | ▼ | 7 | 13 |
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| Fixed Income |
TREND |
THIS WK |
LAST WK |
| Floating Rate Bond | ▲ | 14 | 11 |
| Corporate Bond | ▬ | 9 | 10 |
| Intermediate Term Bond | ▬ | 9 | 9 |
| Short Term Bond | ▬ | 9 | 8 |
| High Yield Bond | ▼ | 8 | 11 |
| Long-Term Bond | ▼ | 7 | 8 |
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| Sectors |
TREND |
THIS WK |
LAST WK |
| Technology | ▲ | 15 | 6 |
| Industrials | ▬ | 13 | 9 |
| Financials | ▬ | 12 | 10 |
| Energy | ▬ | 10 | 12 |
| Consumer Defensive | ▬ | 9 | 12 |
| Utilities | ▬ | 9 | 11 |
| Consumer Cyclical | ▬ | 9 | 10 |
| Communications | ▬ | 9 | 8 |
| Real Estate | ▼ | 8 | 15 |
| Materials | ▼ | 8 | 9 |
| Health Care | ▼ | 6 | 16 |
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| Market Segments |
TREND |
THIS WK |
LAST WK |
| Small Growth | ▲ | 14 | 12 |
| Large Growth | ▬ | 13 | 6 |
| Mid-Cap Value | ▬ | 12 | 16 |
| Mid-Cap Growth | ▬ | 11 | 9 |
| Small Value | ▬ | 10 | 15 |
| Large Value | ▬ | 9 | 14 |
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Notable Newton Moves This Week: The model captured a sharp rotation toward growth and cyclicals. Technology jumped from 6 to 15 to claim the top sector reading, while Large Growth (6 → 13) and Emerging Markets (9 → 15) climbed into strong territory. The other side of the trade faded just as quickly, as Health Care fell from 16 to 6, Real Estate dropped from 15 to 8, and Foreign Developed slid from 13 to 7. The pattern lines up with the week's price action, with lower oil and firmer rate expectations pulling money back toward the names that have led the AI-driven advance.
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Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry and sector performance.
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