This week on Weekly Market Movers, Aya covers the following:

• Markets bounced back, led by tech and AI stocks — with the SpaceX IPO drawing attention through strong early gains and some volatility.
• Short‑term interest rates moved higher as the Fed, under new Chair Kevin Warsh, took a cautious stance — keeping inflation front and center, while leaving the door open for future rate hikes.
• Upcoming data on inflation, economic growth, and business activity could play a big role in what the Fed does next.
• Progress in U.S.–Iran talks helped reopen the Strait of Hormuz, bringing oil prices down and easing inflation worries — but energy prices will remain important to watch.

Watch the full video:

TRANSCRIPT:

Hello and welcome to this edition of Weekly Market Movers from Wealth Enhancement. My name is Aya Yoshioka, Director and Senior Investment Strategist. In these videos, we focus on three things: market performance over the past week, the key macroeconomic data and corporate news driving markets, and what investors should be watching in the week ahead.

Let’s start with the market recap. Markets rebounded during a shortened trading week, as markets were closed on Friday for the Juneteenth holiday. The tech-heavy Nasdaq Composite led the way, rising approximately 2.6%, while the S&P 500 Index gained 0.9%. Small-cap stocks also participated, with the Russell 2000 up 1.2% for the week.

International stocks performed well. Developed markets benefited from improved risk sentiment, with the MSCI EAFE Index up nearly 0.75%. Emerging markets were the standout, rising 4.1% for the week, supported by stabilization in energy markets.

Speaking of energy, crude oil prices declined notably. WTI ended the week at $77.54 per barrel and Brent crude at $80.57 per barrel, both down about 9% for the week and 11% for the month.

In fixed income, bond markets were mixed. The 10-year Treasury yield finished the week at 4.45%, roughly where it began. However, there was more movement on the short end of the curve, with the 2-year yield rising 10 basis points and the 1-year yield increasing 13 basis points over the week.
Now that we’ve recapped market performance, let’s look at what drove these moves, starting with fixed income. The Federal Reserve took center stage this week. While there was no change to the policy rate, there was plenty for investors to evaluate.

A growing number of Fed officials are now expecting one or possibly two rate hikes this year. As a result, bond markets repriced to reflect the potential for a 25-basis-point hike as early as October, which contributed to the rise in short-term yields.

This was the first meeting chaired by Kevin Warsh, and his approach differed from recent predecessors. The Fed’s policy statement removed forward guidance language and was notably shorter, at about 130 words compared to roughly 300 previously. Despite the streamlined format, the message remained clear: inflation continues to be the primary focus of Fed policy.

Moving beyond the Fed, geopolitical developments also played a role. Early in the week, news of an interim agreement between the U.S. and Iran suggested a reopening of the Strait of Hormuz, which contributed to the decline in energy prices. Over the weekend, the U.S. and Iran began formal talks in Switzerland aimed at reaching a more permanent agreement. Under the memorandum of understanding signed last week, both sides have 60 days to negotiate terms.

In corporate news, attention was on the recent SpaceX IPO following its debut on June 12. Shares climbed to a high of $225 on Wednesday, gaining nearly 50% from the IPO price of $135. The rally was supported in part by news of a $60 billion acquisition of AI coding startup Cursor. The stock later pulled back, ending the week at $185, as reports of a potential bond offering weighed on sentiment.

Looking ahead to next week, there are several key areas to watch. First, investors will continue to assess the implications of the Fed’s policy stance, with a focus on whether upcoming inflation data supports the possibility of additional rate hikes.

Second, we’ll receive new economic data. On Tuesday, the S&P Purchasing Managers’ Index, or PMI, will provide insight into business activity. On Wednesday, data on new home sales and mortgage applications will offer a look at the housing market.

Thursday will be particularly important, with revisions to first-quarter GDP along with the latest Personal Consumption Expenditures, or PCE, report, which is the Fed’s preferred measure of inflation. Economists currently expect headline PCE inflation to rise 4.1% year over year and core PCE, which excludes food and energy, to increase 3.5%.

Lastly, markets will continue to monitor developments in the Strait of Hormuz, including tanker traffic and whether the recent decline in oil prices can continue, helping ease energy-related inflation pressures.

That’s all I have for you this week. Thank you for watching Weekly Market Movers from Wealth Enhancement.

This information is not intended as a recommendation. The opinions are subject to change at any time and no forecasts can be guaranteed. Investment decisions should always be made based on an investor’s specific circumstances. Investing involves risk, including possible loss of principal.

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