A Change in Weather

June tested investor nerves and, in the end, rewarded their patience. After a spring melt-up that carried U.S. stocks to a long string of record highs, the market finally caught its breath.^[1] The S&P 500 slipped about 1% for the month, snapping a two-month winning streak, while the technology-heavy Nasdaq fell 2.8%.^[2]

Source: https://www.bloomberg.com/news/articles/2026-06-30/us-stocks-mixed-as-indexes-head-for-best-quarter-since-2020

Stocks managed their best quarter in six years, with chip companies doing the heavy lifting.^[3],[4] The S&P 500 and Nasdaq posted their best quarterly performance since 2020, and both remain up on the year, approximately 9.6% and 12.8% respectively.^[5] The S&P 500 has now set 24 record highs in 2026 alone.^[6]

What changed in June was not necessarily the state of the economy but rather overall sentiment. On one hand, SpaceX went public in the largest initial public offering on record, raising about $75 billion in a vote of confidence on AI excitement.^[7]On the other hand, the stock gave back much of its initial gains within two weeks, reportedly prompting fellow AI contender OpenAI to consider delaying its own listing to 2027.^[8] The technology sector stumbled as a few of its largest names logged their worst months in decades, even as a powerful rally in semiconductor and memory-chip companies kept the broader index from falling further.^[9]

Source: https://www.ft.com/content/42420d57-f466-4b01-bc4a-4d68f9e0b6c0?syn-25a6b1a6=1

Tellingly, money didn’t flee the market so much as rotate within it: the Dow Jones Industrial Average, with heavier exposure to financials, healthcare, and industrials, rose about 2.5% as investors rebalanced away from crowded technology bets.^[10] Since the Mag-7 stocks began to drop in value in mid-May, the S&P 500 has actually held up remarkably well.^[11]

Inflation on the Cusp

The month’s loudest economic story was the trajectory of inflation. In mid-June, the government reported that consumer prices, measured by the Consumer Price Index (CPI), had risen 4.2% year over year through May, the fastest annual pace since April 2023 and well above the Federal Reserve’s 2% goal.^[12],[13] The Fed’s preferred gauge, the Personal Consumption Expenditures (PCE) index, told the same story, rising 4.1% to a three-year high.^[14]

Even though prices across the economy have been climbing, the cause has been relatively narrow and identifiable. The Iran conflict had virtually stopped traffic in the Strait of Hormuz, sending energy prices up 23.5% over the year.^[15] Strip out volatile food and energy, and “core” inflation was calmer, at 2.9%.^[16]This distinction matters, suggesting an energy-driven shock rather than a broad, self-feeding spiral.

Over the course of June, the oil shock began to reverse. As the U.S. and Iran reached an agreement to wind down the conflict and reopen the strait, oil prices dropped significantly. Benchmark prices of crude oil fell below $70 a barrel by late June, its lowest price since the war began and down more than a third from its peak.^[17] Because energy costs (gradually) flow into gas pumps, airfares, and shipping, several economists now believe May marked the peak of this inflation episode, with pressures likely to ease in the second half of the year, so long as the strait stays open.^[18]

New Fed Chair, New Tone

Against this backdrop, the Federal Reserve (The Fed) entered a new era. Kevin Warsh, the new chair, presided over his first policy meeting on June 16–17. The Fed unanimously held its benchmark interest rate steady in a range of 3.50% to 3.75%, where it has held since late 2025. ^[19]

Source: https://www.wsj.com/economy/central-banking/five-takeaways-from-kevin-warshs-first-meeting-as-fed-chairman-89174ad8

The bigger news was the tone. Warsh, a longtime critic of the Fed “over-communicating,” shortened the post-meeting statement and removed language that had hinted at future rate cuts.^[20] More striking, the Fed’s own “dot plot,” a chart summarizing where each official expects rates to go, flipped from projecting a cut this year to signaling a possible rate hike, with nine of eighteen officials now penciling in an increase before year-end.^[21] A central bank that markets had begun the year expecting to cut is now openly debating whether its next move should be to raise rates. Investors interpreted the message as “hawkish”, as the Fed clearly turns its focus to rising prices.^[22]

Source: https://www.bloomberg.com/news/articles/2026-06-30/treasury-market-s-june-rally-bails-out-quarter-and-first-half

As the Fed appeared to refocus on price stability, traders increased bets that the next move in rates would be higher, which chipped away at inflation expectations.^[23] Bond markets saw a rise in policy-sensitive short-term yields (lower prices), while 30-year yields fell to their lowest level in three months (higher prices).^[24]

Labor Market Holds Ground

The May jobs report, released in early June, showed employers added 172,000 jobs, more than double what economists had penciled in, while the unemployment rate held steady at 4.3%, roughly where it has stayed for the better part of a year.^[25]

This remains what economists call a “low-hire, low-fire” market: layoffs are low, but so is fresh hiring, and Americans who lose a job are taking longer to find the next one, with long-term unemployment continuing to climb.^[26] Wages rose about 3.4% over the year, likely not quite enough to keep pace with the roughly 4% rise in prices, meaning many households saw their purchasing power slip even as paychecks grew.^[27]For the Federal Reserve, a job market this sturdy leaves it free to keep its attention on inflation.

Looking Ahead

With July underway, earnings season returns amid high expectations and mixed signals. June left us with record highs giving way to a modest pullback, inflation still hotter than preferred but showing signs of easing, and a new Fed chair signaling a hawkish stance. Beneath it all, the labor market shows resilience, though signs of cooling continue to surface.

In a month full of crosscurrents, it would be easy to be whipsawed by headlines. But our job is not to amplify or react to the noise. It’s to stay focused on what matters most: matching your strategy to your goals, your time horizon, and risk tolerance. A long-term, disciplined strategy positions you for the ups and downs, rather than chasing today’s headlines.

As we make our way through the summer, we hope you are taking time to adventure with family and friends alongside relaxing and recharging. As always, if you’d like to connect to schedule your mid-year review, discuss cash needs, or talk through any changes in your personal or financial situations, we are available and ready to help.

Your Friends at JSF

The information expressed herein are those of JSF Financial, LLC, it does not necessarily reflect the views of NewEdge Securities, LLC. Neither JSF Financial LLC nor NewEdge Securities, LLC gives tax or legal advice. All opinions are subject to change without notice. Neither the information provided, nor any opinion expressed constitutes a solicitation or recommendation for the purchase, sale or holding of any security. Investing involves risk, including possible loss of principal. Indexes are unmanaged and cannot be invested in directly.

Historical data shown represents past performance and does not guarantee comparable future results. The information and statistical data contained herein were obtained from sources believed to be reliable but in no way are guaranteed by JSF Financial, LLC or NewEdge Securities, LLC as to accuracy or completeness. The information provided is not intended to be a complete analysis of every material fact respecting any strategy. The examples presented do not take into consideration commissions, tax implications, or other transactions costs, which may significantly affect the economic consequences of a given strategy. Diversification does not ensure a profit or guarantee against loss. Carefully consider the investment objectives, risks, charges and expenses of the trades referenced in this material before investing. Asset Allocation and Diversification do not guarantee a profit or protect against a loss.

The Bloomberg Barclays U.S. Aggregate Bond Index measures the investment-grade U.S. dollar-denominated, fixed-rate taxable bond market and includes Treasury securities, government-related and corporate securities, mortgage-backed securities, asset-backed securities and commercial mortgage-backed securities.

The S&P 500 Index is an unmanaged, market value-weighted index of 500 stocks generally representative of the broad stock market.

TLT-iShares 20 Plus Year Treasury Bond ETF seeks to track the investment results of an index composed of US Treasury bonds with remaining maturities greater than twenty years.

The CBOE Volatility Index (VIX) is a real-time index that represents the market’s expectations for the relative strength of near-term price changes of the S&P 500 Index (SPX). Because it is derived from the prices of SPX index options with near-term expiration dates, it generates a 30-day forward projection of volatility. Volatility, or how fast prices change, is often seen as a way to gauge market sentiment, and in particular the degree of fear among market participants.

The Nasdaq Composite is a market-capitalization-weighted index consisting of all Nasdaq Stock Exchange listed stocks that are not derivatives, preferred shares, funds, exchange-traded funds or debenture securities.

Treasury Bond- is a U.S. government debt security with a fixed interest rate and maturity between two and 10 years.

Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced in a specific time period. GDP is the most commonly used measure of economic activity.

By clicking on these links, you will leave our server, as they are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

[1] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[2] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[3] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[4] https://www.bloomberg.com/news/articles/2026-06-30/us-stocks-mixed-as-indexes-head-for-best-quarter-since-2020

[5] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[6] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[7] https://www.cnbc.com/2026/06/11/spacex-raises-75-billion-in-record-setting-ipo-ahead-of-nasdaq-debut.html

[8] https://www.cnbc.com/2026/06/26/openai-ipo-timeline-delayed-kalshi-predictions.html

[9] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[10] https://www.cnn.com/2026/07/01/business/stock-market-up-inflation-war

[11] https://www.ft.com/content/42420d57-f466-4b01-bc4a-4d68f9e0b6c0?syn-25a6b1a6=1

[12] https://www.bls.gov/news.release/cpi.nr0.htm