Monthly Market Commentary – June 2026

(As of 06/30/2026)

---

The Signal

Key Movements

June’s central tension was that positive US economic data coincided with weakness in certain large-cap equities. A hawkish Federal Reserve debut under Kevin Warsh, resilient labor data, and inflation above 4% contributed to a shift in the market’s rate assumption from potential cuts to the possibility of hikes, even as a US-Iran ceasefire dropped oil and eased the geopolitical premium. The result was a split tape: economically sensitive stocks broadened higher while megacap technology and rate-sensitive havens sold off.

The month’s return dispersion told the story of rotation rather than broad risk-off. The Russell 2000 gained 3.74% and the Dow rose 2.71%, while the S&P 500 slipped 0.95% and the Nasdaq 100 was roughly flat at -0.12%. Sector leadership confirmed the split: industrials rose 7.02% and health care 6.88%, while communication services fell 7.68%, energy dropped 5.01%, and consumer discretionary lost 3.84%. The S&P GSCI Energy Index sank 4.64% as crude retreated on the Strait of Hormuz reopening. In rates, the 2-year yield rose 12 basis points on the hawkish repricing while the 30-year fell 13 basis points, a flattening consistent with a Fed leaning against inflation.

Trend signals suggested that the equity split may have reflected more than short-term market noise. Small-cap trend stayed constructive across horizons for the Russell 2000, and the Nikkei 225 carried the same firm multi-month tone, while the S&P 500’s near-term trend had turned slightly negative even as its longer trend held positive. The US dollar index showed a firm tone across short, medium, and long horizons, aligning with the yield move. Gold’s short- and medium-term trend turned decidedly weak as real yields and the dollar pressured bullion. For risk monitoring, the divergence between broadening cyclical participation and weaker megacap leadership was an important development to monitor, since index-level calm masked concentrated pressure at the top.

Trends

Bonds

Contract	Short Term	Medium Term	Long Term
10Y US T-Note	Positive	Negative	Negative
30Y US T-Bond	Positive	Slightly Negative	Slightly Negative
Japanese Bond	Positive	Negative	Very Negative
Long Gilt	Positive	Slightly Negative	Slightly Negative
Long German Bund	Positive	Slightly Positive	Slightly Negative
2Y US T-Note	Negative	Negative	Negative

Currencies

Contract	Short Term	Medium Term	Long Term
US Dollar Index	Positive	Positive	Positive
British Pound	Negative	Negative	Negative
Euro	Negative	Negative	Negative
Australian Dollar	Very Negative	Negative	Positive
Canadian Dollar	Very Negative	Very Negative	Very Negative
Japanese Yen	Very Negative	Very Negative	Very Negative
Swiss Franc	Very Negative	Very Negative	Negative

Commodities

Contract	Short Term	Medium Term	Long Term
Natural Gas	Positive	Positive	Very Positive
Soybeans	Negative	Negative	Neutral
Gold	Very Negative	Very Negative	Slightly Negative
WTI Crude Oil	Very Negative	Neutral	Positive
Silver	Very Negative	Very Negative	Positive
Brent Crude Oil	Very Negative	Neutral	Positive
Corn	Very Negative	Negative	Negative
Wheat	Very Negative	Slightly Positive	Slightly Positive

Equities

Contract	Short Term	Medium Term	Long Term
Russell 2000	Positive	Very Positive	Very Positive
Nikkei 225	Positive	Very Positive	Very Positive
Euro Stoxx 50	Positive	Positive	Positive
E-Mini Nasdaq 100	Neutral	Very Positive	Positive
E-Mini S/P 500	Slightly Negative	Positive	Positive
Hang Seng Index	Very Negative	Very Negative	Negative

Drivers

Important themes to consider

The FOMC held rates at 3.50%-3.75% on June 17 in a unanimous vote, but new Chair Kevin Warsh delivered a hawkish shift, stripping easing-bias language and declining to submit his own dot. Nine of eighteen officials now pencil in at least one hike this year, a stark reversal from the prior median that pointed to cuts. Markets repriced hard: the 2-year Treasury yield jumped and equities suffered their worst session under a new Fed leader since 1994. The cross-asset implication included a firmer dollar and potential pressure on rate-sensitive equity valuations.

On the geopolitical front, Washington and Tehran signed a memorandum of understanding to end their conflict, reopen the Strait of Hormuz, and lift oil sanctions. As the deal went live, we saw the first vessel crossings occur, with crude oil falling to the low $70s from levels above $100 a month earlier. Lower energy may have eased the inflation impulse, but with a 60-day negotiating window and unresolved nuclear terms, a residual security premium remains. For markets, cheaper oil coincided with stronger performance inairlines and cyclicals while energy shares lagged.

June also exposed a shift in the artificial-intelligence trade as hyperscalers moved from self-funded capex toward debt and equity issuance, making the theme more rate-sensitive. When firmer labor data and a hawkish Fed lifted rate expectations, technology and semiconductor names bore the brunt, and the Magnificent Seven fell more than 10% by the trough of the sell-off. Inflation above 4% in May, driven largely by energy, capped equity multiples even as core CPI came in at a milder 0.2% monthly. Concentrated weakness among several megacap companies appeared to contribute to softer index-level performance despite broadening participation elsewhere.

Looking Forward

What we’re watching

Key variables to monitor in July include inflation and economic growth, with the Fed’s reaction function in focus. In one path, the collapse in oil and the technology selloff could cool inflation expectations, which could increase the likelihood that the July 28-29 FOMC meeting results in no change to policy rates. In the alternative path, another firm payroll report or stronger-than-expected CPI reading could increase expectations for additional rate hikes and may place pressure on equity valuations through renewed rate repricing. Early catalysts include the July 2 employment report, the July 9 reciprocal-tariff deadline, and the July 14 June CPI release. A potential El Niño and the Section 122 tariff expiration later in the month could also add supply-side inflation risk. Whether solid economic data again pressures large-cap equities through the rate lens rather than supporting them remains a question into month-end.

Investor Lens

Practical framing for investors

Concentration risk beneath calm indices. Investors reading only headline index levels may miss that June’s modest S&P 500 decline masked intense megacap technology weakness. Recent market performance suggests leadership may be rotating toward industrials, health care, and small caps as rate-sensitive growth names lagged. For portfolios, investors may wish to consider whether returns rest on a narrow set of names or a widening base, since concentrated exposure behaves differently when rate expectations shift against long-duration equities.

Higher-for-longer rate posture. The repricing from expected cuts toward the possibility of additional rate hikes changes the discount-rate backdrop for client portfolios. This environment tends to pressure long-duration assets and non-yielding stores of value, as gold’s June weakness showed. Portfolio considerations for this center on how sensitive holdings are to real rate moves.

Communication opacity raises data sensitivity. With the Fed removing forward guidance, each inflation and employment release may invite larger market reactions. For portfolios, we could see more episodic volatility clustering around releases rather than around FOMC meetings and increases in hedging premiums.

Returns as of june 30, 2026

Bonds

Index	1M	3M	QTD	YTD	TTM
ICE BofA US Corporate High Yield Index	0.02%	2.23%	2.23%	1.67%	5.51%
S&P US Aggregate Bond Index	-0.03%	0.5%	0.5%	0.55%	3.63%
ICE BofA US Corporate Investment Grade Index	-0.06%	1.22%	1.22%	0.79%	4.25%

Commodities

Index	1M	3M	QTD	YTD	TTM
S&P GSCI Agriculture and Livestock Index (Spot)	-1.88 %	-4.12 %	-4.12 %	2.68 %	2.87 %
S&P GSCI Commodities Index (Spot)	-3.94 %	-10.47 %	-10.47 %	21.63 %	22.84 %
S&P GSCI All Metals Index (Spot)	-4.41 %	-0.49 %	-0.49 %	5.9 %	33.46 %
S&P GSCI Energy Index (Spot)	-4.64 %	-16.51 %	-16.51 %	42.42 %	29.7 %

Equities

Index	1M	3M	QTD	YTD	TTM
Russell 2000 Index	3.74%	21.49%	21.49%	22.57%	40.78%
Dow Jones Industrial Average Index	2.71%	13.38%	13.38%	9.76%	20.65%
S&P 500 Equal Weight Index	2.38%	11.39%	11.39%	12.13%	19.2%
Nasdaq 100 Index	-0.12%	27.74%	27.74%	20.31%	34.38%
MSCI World ex US Index	-0.41%	10.16%	10.16%	9.33%	21.37%
MSCI EAFE Index	-0.42%	10.51%	10.51%	9.34%	20.32%
S&P 500 Index	-0.95%	15.2%	15.2%	10.21%	22.32%
MSCI Emerging Markets Index	-1.89%	23.49%	23.49%	23.35%	43.39%

Equity Sectors

Index	1M	3M	QTD	YTD	TTM
S&P 1500 Industrials Sector Index	7.02%	15.35%	15.35%	20.78%	28.89%
S&P 1500 Health Care SectorIndex	6.88%	9.56%	9.56%	4.28%	20.61%
S&P 1500 Financials Sector Index	4.56%	9.36%	9.36%	-0.36%	5.03%
S&P 1500 Real Estate Sector Index	1.54%	9.64%	9.64%	11.92%	12.88%
S&P 1500 Consumer Staples Sector Index	0.85%	0.55%	0.55%	8.2%	5.06%
S&P 1500 Information Technology Sector Index	0.85%	0.55%	0.55%	8.2%	5.06%
S&P 1500 Utilities Sector Index	0.85%	0.55%	0.55%	8.2%	5.06%
S&P 1500 Materials Sector Index	-0.71%	2.19%	2.19%	11.65%	17.09%
S&P 1500 Consumer Discretionary Sector Index	-3.84%	9.47%	9.47%	-0.12%	9.34%
S&P 1500 Energy Sector Index	-5.01%	-12.93%	-12.93%	20.47%	30.01%
S&P 1500 Communications Services Sector Index	-7.68%	8.35%	8.35%	0.9%	21.25%

Rates, Credit, Volatility

Index	1M	3M	QTD	YTD	TTM
US 2Y Treasury Yield	12.0 Bps	31.0 Bps	31.0 Bps	63.0 Bps	38.0 Bps
Bloomberg IG OAS Index	2.0 Bps	-14.0 Bps	-14.0 Bps	-3.0 Bps	-10.0 Bps
ICE BofA US MOVE Index	1.74 Pts	-24.09 Pts	-24.09 Pts	8.0 Pts	-18.3 Pts
CBOE Volatility Index	1.13 Pts	-8.8 Pts	-8.8 Pts	1.5 Pts	-0.28 Pts
Bloomberg HY OAS Index	1.0 Bps	-53.0 Bps	-53.0 Bps	-6.0 Bps	-21.0 Bps
US 10Y Treasury Yield	-7.0 Bps	8.0 Bps	8.0 Bps	20.0 Bps	14.0 Bps
US 30Y Treasury Yield	-13.0 Bps	-2.0 Bps	-2.0 Bps	2.0 Bps	8.0 Bps

---