Market Recap - Thursday June 25, 2026
Broadening Leadership and AI Strength Offset Inflation Concerns
U.S. stocks finished mixed today, but the headline numbers didn’t tell the full story. The S&P 500 finished essentially flat, while the Dow and Russell 2000 posted modest gains. Underneath the surface, many economically sensitive sectors continued to perform well, even as some of the largest technology companies took a breather.
Overall, it was another day where investors rotated away from some of the biggest technology stocks and into a broader mix of companies across the market.
AI Investment Story Remains Strong
The biggest theme continued to be artificial intelligence. Micron’s outstanding earnings report from Wednesday continued to ripple through the semiconductor industry. The company not only delivered much stronger-than-expected results, but also said demand remains so strong that it expects memory supply to stay tight through at least 2027.
Perhaps even more importantly, Micron revealed it has signed 16 long-term customer agreements, locking in both pricing and purchase commitments. That reassured investors that AI infrastructure spending isn’t slowing anytime soon.
Qualcomm also added to the optimism after raising its long-term outlook and highlighting significant growth opportunities in AI data centers.
As a result, semiconductor stocks continued to outperform.
Leadership Continues to Expand Beyond Big Tech
While AI-related semiconductor companies rallied, many of the traditional “Magnificent Seven” technology stocks struggled.
Instead, investors continued buying areas of the market that had largely lagged earlier this year, including banks, homebuilders, industrials, airlines, machinery companies, and small-cap stocks
This broadening of market leadership is generally viewed as a healthy sign because gains are no longer being driven by only a handful of mega-cap technology companies.
Inflation Data Gives Markets Some Relief
One of today’s biggest economic reports was the Federal Reserve’s preferred inflation measure—the Personal Consumption Expenditures (PCE) Index.
The report largely came in as expected:
Core inflation increased 0.3% during May.
Core inflation now stands at 3.4% year-over-year, still above the Fed’s long-term 2% target.
While inflation remains elevated, the report did not surprise to the upside, which helped calm fears that inflation is accelerating again.
Other economic data also suggested the economy remains on relatively solid footing:
Consumer spending was stronger than expected.
Personal income also exceeded expectations.
Initial unemployment claims remained low.
First-quarter GDP was revised higher to 2.1% annualized growth.
Taken together, the data continues to support the view that the U.S. economy remains resilient despite higher interest rates.
Interest Rates Continue to Ease
Treasury yields declined again Thursday, extending Wednesday’s rally.
Lower bond yields generally help support stock valuations because they reduce borrowing costs and make future corporate earnings more valuable in today’s dollars.
Markets remain sensitive to the Federal Reserve following last week’s more hawkish tone, but today’s inflation report didn’t provide any new reason for policymakers to become more aggressive.
Oil Stabilizes After Sharp Decline
Oil prices rose modestly after falling for nine consecutive sessions.
Markets briefly reacted to reports of another incident involving a cargo ship in the Strait of Hormuz, but investors largely viewed it as an isolated event rather than a meaningful disruption to global energy supplies.
Overall, expectations remain that increased oil production and improving shipping conditions will keep energy prices from becoming a major inflation concern.
Corporate Highlights
Several notable company developments occurred today:
Micron surged after delivering another exceptionally strong earnings report and forecasting continued AI-driven demand.
Qualcomm raised its long-term growth outlook and highlighted expanding opportunities in AI infrastructure.
Apple announced price increases for several Mac and iPad models, citing rising memory component costs.
Several major banks—including JPMorgan, Goldman Sachs, Morgan Stanley, and Wells Fargo—increased dividends after successfully passing the Federal Reserve’s annual stress tests.
Bio-Techne shares jumped after agreeing to be acquired by Germany’s Merck KGaA in an $11.3 billion transaction.
Here’s Our Take
Today’s market action reinforced a trend we’ve been watching develop over the past couple of weeks. While the major indexes appear relatively unchanged, leadership beneath the surface continues to broaden. Investors are gradually expanding beyond the largest technology companies into financials, industrials, homebuilders, and smaller companies. Historically, this type of broader participation tends to create a healthier and more durable market advance than one driven by only a handful of stocks.
At the same time, the AI investment story remains firmly intact. Micron’s earnings suggest that demand for AI infrastructure remains exceptionally strong, supporting continued investment throughout the semiconductor supply chain. While questions remain about long-term AI profitability and returns on investment, today’s results reinforce that spending has not meaningfully slowed.
Finally, today’s inflation data offered another encouraging sign. Inflation remains above the Federal Reserve’s 2% target, but it came in largely as expected and did not show signs of reaccelerating. Combined with continued consumer spending and steady economic growth, the economy continues to demonstrate resilience despite higher interest rates. Markets will likely remain focused on inflation, Federal Reserve policy, and the upcoming second-quarter earnings season, which should provide further insight into whether strong corporate fundamentals continue to support current valuations.
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