WEEKLY MARKET RECAP – June 12, 2026

The S&P 500, NASDAQ, and Dow each posted modest gains of about 0.7% for the week, though the path higher was far from smooth. Stocks came under pressure on Wednesday before rebounding over the final two trading sessions. Even with the recovery, all three indexes remained below the record highs reached in early June.

Inflation continued to run at elevated levels. The Consumer Price Index showed prices rising at a 4.2% annual rate in May, the highest reading in more than three years. While the year-over-year figure increased, monthly inflation cooled slightly from April, and price pressures outside the energy sector remained relatively stable. Meanwhile, the Producer Price Index rose at a 6.5% annual rate, its fastest pace since November 2022.

Small-cap stocks significantly outperformed their large-cap counterparts. The Russell 2000 advanced roughly 4% for the week, reaching a record high and extending its lead among major U.S. equity benchmarks. The index was up about 19% year to date through Friday.

Overseas, the European Central Bank raised interest rates for the first time since 2023 and revised its economic outlook. Policymakers approved a widely anticipated quarter-point increase while citing persistent inflation, elevated energy costs, and ongoing tensions in the Middle East. The ECB also raised its inflation forecast and lowered its growth projections.

Oil prices remained highly sensitive to geopolitical developments. U.S. crude surged more than 3% on Wednesday before reversing course and falling to its lowest level since mid-April by Friday afternoon. Oil briefly traded above $93 per barrel midweek before ending near $84, down roughly 6% for the week.

Market volatility reflected shifting sentiment surrounding the Middle East conflict. The Cboe Volatility Index climbed to its highest level since April 7 on Wednesday but retreated sharply by week’s end, closing nearly 18% below the previous Friday’s level.

Consumer sentiment improved modestly after three consecutive monthly declines. The University of Michigan’s preliminary June reading rose to 48.9 from May’s final reading of 44.8, suggesting some stabilization despite ongoing concerns about energy prices.

Investors now turn their attention to the Federal Reserve’s upcoming policy meeting, which concludes Wednesday and marks Kevin Warsh’s first meeting as Fed chair. While markets broadly expect the Fed to leave rates unchanged, Warsh’s comments and the updated policy statement will be closely watched for signals on whether policymakers are considering a rate hike later this year.