Summer Rallies Start Here?

AI Rebounds, Dow Pauses, Geopolitics Return

Key Takeaways Last Week

U.S. stocks rose on AI enthusiasm lifting the S&P 500 and Nasdaq, while the Dow and small caps lagged. The S&P 500 gained +1.2%, the Nasdaq rose +1.7%, the Dow fell -0.5%, and the Russell 2000 declined -0.6%. Year to date, the S&P 500 is up +10.7%, the Nasdaq +13.1%, the Dow +9.5%, and the Russell 2000 +20.0%.

• AI infrastructure, cloud networking, tech hardware, and mega technology returned to market leadership.
• Meta posted its best week since early 2024 after unveiling new AI models and plans to expand its computing and custom-chip capacity.
• Treasury yields rose, with the 2-year near 4.16%, the 10-year near 4.54%, and the 30-year near 5.05%.
• U.S.–Iran tensions rose on control of the Strait of Hormuz, raising the risk of another oil and inflation shock.
• Initial unemployment claims printed 215,000, while May consumer credit contracted at a 4.7% annual rate.

U.S. Stock Performance – Index and Sector Moves

The S&P 500 closed at 7,575, the Dow Jones Industrial Average at 52,637, the Nasdaq Composite at 26,281, and the Russell 2000 at 2,977. The S&P 500 and Nasdaq recorded their second consecutive weekly gains, while the Dow snapped a four-week winning streak.

Sector leadership moved toward technology, communications, networking, servers, cloud infrastructure, and selected energy names. The index gains were heavily influenced by Meta, Nvidia, networking companies, and AI infrastructure beneficiaries.

Source: Seeking Alpha

Sector performance moved away from momentum and toward GARP.

Source: Seeking Alpha

S&P 500 Weekly Leaders and Laggards Ranked

Top Performers (WTD):

1. Arista Networks, ANET, +16.86%: Renewed demand for AI-networking exposure, high-speed Ethernet switching, and data-center infrastructure.
2. Meta Platforms, META, +14.81%: AI-model, compute-capacity, custom-chip enthusiasm.
3. Akamai Technologies, AKAM, +11.50%: AI-security partner for WWT’s ARMOR framework.
4. Seagate Technology, STX, +11.00%: AI-related storage demand, tight hard-disk supply.
5. Broadcom, AVGO, +10.96%: Multiyear chip-supply arrangements with Apple.

Bottom Performers (WTD):

1. Moderna, MRNA, -14.41%: JPMorgan reiterated a Sell rating and identified the stock as a favored short.
2. Builders FirstSource, BLDR, -10.63%: pressure from weak housing-related demand
3. Paramount Skydance, PSKY, -9.43%: Specific verified company catalyst:
4. Alexandria Real Estate Equities, ARE, -8.94%: Weakness in life-science office real estate.
5. Intel, INTC, -8.73%: Concerns about 18A manufacturing yields, foundry execution.

Breadth & Participation

Breadth remained mixed. The S&P 500 and Nasdaq advanced, but the Dow and Russell 2000 declined, indicating that market leadership narrowed back toward large-cap technology and AI-linked stocks. Meta alone gained nearly 15% and materially increased the S&P 500’s weekly return.

The equal-weight market lagged the cap-weighted S&P 500, while networking, servers, cloud infrastructure, and selected semiconductor names attracted most of the momentum flows. Small-cap weakness suggests that the rebound was more concentrated than the prior week’s rotation.

Source: Seeking Alpha

International/Global

International markets were mixed. South Korean memory-chip producer SK Hynix surged in its U.S. trading debut, reinforcing enthusiasm around AI memory and data-center infrastructure. Broader overseas markets were less consistent as investors monitored oil, trade policy, and renewed Middle East tensions.

The United States demanded that Iran publicly guarantee commercial passage through the Strait of Hormuz and end attacks on shipping. Iran continued to assert control over navigation through the strait, leaving the June de-escalation agreement under significant strain.

Source: Seeking Alpha

Volatility & Risk Sentiment

Risk sentiment improved in large-cap technology but remained cautious elsewhere.

VIX: approximately 15.03, new low
MOVE Index: 68.5

The lower VIX suggests that equity investors remained comfortable despite rising yields and geopolitical risk. Weakness in small caps and the Dow showed that confidence was not evenly distributed across the market.

Bonds, Credit & Interest Rates

Treasury yields moved higher during the week.

• 2-year Treasury: 4.16%
  · 10-year Treasury: 4.54%
  · 30-year Treasury: 5.05%
  · 2-year/10-year spread: approximately +38 basis points

The positive 2s/10s spread reflected a steeper yield curve, while the 30-year yield above 5% continued to pressure housing, long-duration equities, and other rate-sensitive assets.

Source: Seeking Alpha

Economic Data, Monetary Policy & Earnings

The Federal Reserve released minutes from its June 16–17 meeting. Policymakers had left rates unchanged, and the minutes reinforced the debate over whether persistent inflation could require additional tightening. Initial unemployment claims totaled 215,000 for the week ending July 4, down 2,000 from the prior week. May consumer credit was unchanged overall. Revolving credit declined at a 4.7% annual rate, while nonrevolving credit increased at a 1.6% rate. Households are more cautious about adding credit-card balances.

2nd-quarter earnings season begins with banks. The call is for strong S&P 500 profit growth, but the hurdle is high after substantial estimate increases and continued AI-related valuation expansion.

Commodities, Currencies & Macro Assets

WTI crude opened Friday near $71.77/bbl, while Brent opened near $76.03/bbl. Oil gained during the week as U.S.–Iran tensions returned, although prices remained below their earlier 2026 peaks.

Gold: $4150
Dollar Index: $100
Bitcoin: approximately $64,400

Source: Seeking Alpha

What Matters This Week

• Tuesday, July 14: June CPI and real earnings. This is the week’s key macro release. The BLS calendar confirms CPI and real earnings at 8:30 a.m. ET.
• Tuesday-Wednesday: Fed Chair Kevin Warsh testimony. Markets will listen for whether the Fed is more worried about inflation persistence from oil or cooling labor demand.
• Wednesday, July 15: June PPI. Important for pipeline inflation, margins, and whether the oil move is showing up beyond headline CPI.
• Earnings season begins in earnest. Major banks report, along with key AI/semiconductor read-throughs including ASML/TSMC and later Netflix. The question is whether earnings can validate tech valuations while banks give a clean read on credit, loan growth, and capital markets activity.

Bottom Line

The S&P 500 and Nasdaq advanced as investors returned to AI, cloud networking, servers, and mega-cap technology. Dow and Russell 2000 declined, showing that market narrowed after the broader rotation. The strongest signal was the rebound in companies tied directly to AI networking and computer infrastructure. The principal risks remain elevated Treasury yields, very high earnings expectations, renewed U.S.–Iran tensions, and the possibility that another energy shock revives inflation pressure.

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Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.