WEEKLY MARKET RECAP – June 26, 2026

Semiconductor stocks came under heavy pressure, while several traditionally defensive sectors outperformed, producing sharply different results across the major U.S. indexes. The Dow gained 0.6% on a total return basis, while the NASDAQ dropped 4.6% and the S&P 500 declined 1.9%. For the S&P 500, it marked only its second weekly loss in the past 13 weeks.

Large-cap value stocks continued to outperform growth stocks by a wide margin, extending value’s lead for the year. A large-cap growth benchmark fell 3.4% for the week, while its value counterpart gained 0.3%. Year to date, the growth index was up just 1.0%, compared with a 16.4% return for the value index.

Inflation remained elevated, with the Federal Reserve’s preferred gauge showing prices at their highest level in more than three years. The Personal Consumption Expenditures (PCE) Price Index rose 4.1% year over year in May, matching economists’ expectations. Core PCE inflation, which excludes food and energy, came in at 3.4%.

The Commerce Department revised first-quarter economic growth higher, reporting that U.S. GDP expanded at a 2.1% annualized rate, up from the previous estimate of 1.6%. The upward revision was driven largely by lower import figures, which boosted GDP and offset weaker consumer spending.

Oil prices continued to retreat as tensions in the Middle East eased. U.S. crude traded near $69 per barrel on Friday, down more than 8% for the week and significantly below the $100-plus levels seen in mid-May. Despite the recent decline, oil remained roughly 20% higher for the year.

Consumer sentiment improved as gasoline prices moderated, ending a three-month slide that had pushed confidence to record lows. The University of Michigan’s final June reading rose to 49.5 from 44.8 in May, while long-term inflation expectations declined to 3.3% from 3.9%.

Looking ahead, investors will focus on Thursday’s employment report, released ahead of Friday’s holiday market closure, for further insight into the strength of the labor market. In May, the economy added 172,000 jobs, marking the third consecutive month in which payroll growth exceeded economists’ expectations.