Weekly Market Recap: Week Ending July 2, 2026The market pulled off a quiet magic trick this week. Even as the semiconductor names that led the entire first-half rally sold off hard, all three major indexes finished the holiday-shortened week higher, and the Dow closed at a fresh record. The Week in Numbers
🟢 S&P 500: up about 1.8% for the week, closing near 7,483
🟢 Nasdaq: up about 2.1%, despite a sharp chip selloff late in the week
🟢 Dow: up about 2%, closing at a record high near 52,900
📉 10-Year Treasury yield: eased further after Thursday's soft jobs report
📉 Oil: WTI hovered near $67, extending its recent slide The Jobs Report
The headline event landed Thursday, moved up a day because of the holiday. The economy added just 57,000 jobs in June, well short of the roughly 115,000 expected, and prior months were revised lower by a combined 74,000. The unemployment rate actually ticked down to 4.2%. A cooler labor market would normally read as bad news, but in the current environment it eased worries that the Fed might need to raise rates again to fight inflation. That is why the broad market took it as a relief. The Rotation Deepens
The story that started last week accelerated. Investors kept pulling money out of the red-hot semiconductor and AI trade, which had surged more than 80% in the first half, and spread it into traditional sectors, value names, and defensives. Chips fell for a second straight session into Thursday, with the broad semiconductor group down sharply, while names like Apple, Walmart, and Visa helped carry the Dow to its record. Tesla slipped even after reporting strong second quarter deliveries, a reminder that in a rotation, good news does not always lift a stock. The Bigger Picture
This week also closed the book on a strong first half of 2026. The Dow finished the first six months up about 8.9%, the S&P 500 up about 9.6%, and the Nasdaq up about 12.8%, with small caps posting one of their best first-half stretches in decades. A market that can rotate leadership without falling apart is generally a healthier one than a market carried by only a handful of names. THE WEEK AHEAD | Week of July 6
The holiday is behind us and the calendar is on the lighter side, so a single event carries most of the weight. The main event is Wednesday, when the Federal Reserve releases the minutes from its June meeting. These matter more than usual because it was the first meeting under the new Fed chair, who has stepped back from traditional forward guidance, leaving the minutes as one of the clearer windows into the committee's thinking. One caveat worth keeping in mind: these minutes predate both Thursday's soft jobs report and recent comments suggesting inflation risks have eased, so they may read more hawkish than the current mood. What to Watch FOMC minutes Wednesday, the week's main catalyst Whether the chip and AI selloff stabilizes or the rotation into value and defensives deepens The 10-Year Treasury yield, and whether it keeps drifting lower Oil and any Strait of Hormuz headlines Positioning ahead of second quarter earnings season, which ramps up the following week
Bottom line: A record on the Dow, a soft jobs print the market chose to read as good news, and a rotation that is broadening rather than breaking. Heading into a quieter week, the big question is whether the Fed minutes reinforce the calmer inflation narrative or complicate it. Staying diversified across sectors, rather than chasing whatever led last quarter, tends to serve investors well in moments like this. Weekly Market Recap Link Work With Me Important Disclosures
|
