Coming off a holiday-shortened week filled with tons of labor market data and a surprising jobs report, investors are greeted with a relatively quiet stretch in the week ahead.
Markets will pick things up after a mixed Thursday that saw an unsure market with the S&P 500 (^GSPC) closing flat, the Nasdaq (^IXIC) falling 0.8%, and the Dow (^DJI) gaining 1.1%.
Monday is likely to be the biggest day to watch on the economic calendar, with a host of index readings from S&P Global and the Institute of Supply Management set to give investors a read on the state of the US service economy.
That data comes after the monthly private payrolls release from data provider ADP showed that the services side of the economy added the dominant count of jobs in June.
In the corporate world, reports from PepsiCo (PEP) on Thursday and Delta Air Lines (DAL) on Friday should highlight the week. PepsiCo’s results should give investors some insight into the state of the American consumer, while Delta is set to provide one more read on the lasting effects of the war in Iran and the energy crisis it kicked off.
Jobs report complicates rate-hike bets
Heading into Thursday, markets were increasingly convinced that a rate hike within the year by Kevin Warsh’s Federal Reserve was all but assured. Then came the June jobs report.
The US economy added 57,000 jobs last month, roughly half the jobs economists had expected. At the same time, May’s massive 172,000 addition was revised down to 129,000, and April’s tally was lowered to 148,000 from 179,000. Not exactly the shining example of the healthy labor market Warsh has been counting on.
While the market continued to fully price in one Fed rate hike this year following the report, markets pulled back slightly on their conviction. On Thursday morning, traders assigned roughly 75% odds that rates would end the year higher than they are now, per CME data. On Wednesday, those odds stood at roughly 84%.
In his first post-Fed decision press conference, Chairman Kevin Warsh focused heavily on inflation and his goal to get it back to the Fed’s 2% target rate, which has remained elusive amid the energy shock of the Iran war.
While June’s employment data was weaker, many economists believe inflation and unemployment may not be particularly linked at the moment, keeping the pressure firmly on price data — something to keep in mind as earnings season approaches.
Job seekers meet with recruiters during the HIRE360 Diversity Hiring Expo & Mega Career Expo at the Carson Event Center on June 30, 2026, in Carson, California. (Justin Sullivan/Getty Images) ·Justin Sullivan via Getty Images
The first-half AI story was all about hardware
The tech trade through the first half of 2026 was, in a word, imbalanced.
The iShares Expanded tech and software ETF (IGV), which tracks a variety of names in the tech sector, is down 12% on the year. Even the Magnificent Seven (MAGS), once the bastions of Big Tech, have, as a group, lost investors 2% over the past six months.
Chip stocks, on the other hand, have had a blowout six months driven by euphoria around memory and storage sales and the need for traditional processors to power the AI build-out.
Micron (MU) was the poster child for explosive growth in the first two quarters of the year, with shares rising an astonishing 308%. Intel (INTC), which is continuing its turnaround effort, rose a similarly impressive 280%, while AMD (AMD) rocketed 173% higher in the period. Take it all together, and the Philadelphia Semiconductor Index (^SOX), which tracks the chip trade, has returned investors roughly 75% since Jan. 1.
That trend’s not likely to go anywhere, according to Bank of America tech analyst Vivek Arya, as the build-out of the physical backbone behind AI continues to rush forward. It’s one more reminder that while AI might be the brainchild of software-minded Silicon Valley, the AI economy is physical.
“We reiterate our thesis of the AI industry moving to addressing structural and physical (chips, power) constraints, from having to defend return-on-investment before,” Arya wrote to clients. “Memory chip shortages and price inflation remain the critical moving pieces.”
People view computer memory and data storage products from American multinational semiconductor firm MICRON TECHNOLOGY, at the COMPUTEX TAIPEI trade show, in Taipei, Taiwan, on June 2, 2026. (Daniel Ceng/Anadolu via Getty Images) ·Anadolu via Getty Images
Economic and earnings calendar
Monday
Economic data: S&P Global US services PMI, June final reading (51.3 previously); S&P Global US composite PMI, June final reading (52.2 previously); ISM services index, June (54.2 expected, 54.5 previously); ISM services prices paid, June (70 expected, 71.3 previously); ISM services new orders, June (57.5 expected, 57.3 previously); ISM services employment, June (48.1 expected, 47.9 previously)
