July 3, 2026

Equity markets saw 2026’s first half draw to a close on a generally constructive note. Tech did a good portion of the heavy lifting, while unwinding some of the mega-cap and AI rotational trades were seen in recent sessions. Nevertheless, volatility lingered in portions of the AI infrastructure stack, particularly for pick-and-shovel sectors like semis and memory. Oil prices continued to tumble, amid fresh data signaling inflation and inflation expectations have moved in central bankers’ desired direction. Fed Chairman Warsh even acknowledged as much speaking in Portugal while emphasizing prices are still too high. Amid repeated kinetic exchanges, the U.S. and Iran seemed grudgingly determined to pursue negotiations around the MOU reached last month. Hormuz traffic continued to rebound and the case for energy supplies to expand beyond where they stood before the war grew stronger. Higher OPEC+ quotas, the UAE’s departure from OPEC, Iraq’s threatened exit from the cartel, the full removal of Iranian oil sanctions, and higher production in the U.S./Venezuela have all factored into keeping a lid on oil prices. May JOLTS jobs data jumped up towards 7.6M openings, pushing up Treasury yields initially. EU CPI readings were broadly cooler than expected, but came alongside generally robust retails sales and consumer data. June total non-farm payrolls substantially missed estimates with the prior two months jobs growth revised net negative. The Household Survey was even worse than the Establishment Survey, with a sharp 507K drop in the number of employed people. The unemployment rate fell to 4.2% but the impetus was a notable drop in labor market supply illustrated by a decline in the participation rate. Fed fund futures markets pushed back pricing expectations of a Fed rate hike to December from October following the data. The USD/JPY Yen broke above 162 for the first time in 40 years. Gold and Bitcoin saw some buying to kick off Q3 after massively underperforming equity markets in Q2. For the week, the S&P gained 1.8%, the DJIA was up 2%, and the Nasdaq added 2.1%. European bourses joined the risk-on sentiment with the German DAX advancing 4.49% and the French CAC40 gaining 1.49%. Asia Pacific stock markets were once again bifurcated, with Japan advancing 0.55% and Hong Kong’s Hang Seng surging 2.99%. Your BSD Global Tech Hedge Fund added 0.5% this past week. Corporate news featured a smattering of earnings reports, AI sector news, and auto sales figures. Nike was one of the few marquee names to report this week, touting a big earnings number driven by tariff refunds, but saw the stock dragged down further by continued declines in the key China market. In the AI realm, a report that Meta is looking to sell its excess computing capacity to external customers contributed to an aggressive drawdown during Wednesday’s session in chip/component stocks. Q2 auto sales figures showed that the energy shock clearly drove consumers back toward EVs in the last quarter: Tesla easily exceeded delivery expectations for the period, while Toyota’s monthly sales are now consistently over 50% electric. Ford was a notable laggard amid product overhauls and the wind down of some brands, showing a more than 10% drop in Q2 sales, with its unpopular electric lines suffering a 40% y/y decline.

Investors head into the second full week of July focused on the start of second-quarter earnings season, the Federal Reserve’s latest meeting minutes, and Wall Street’s first analyst ratings on newly public SpaceX. The earnings calendar begins to pick up on the consumer front with reports from PepsiCo and Delta Air Lines. Levi Strauss also reports, while Costco will release its closely watched monthly sales figures. SpaceX will remain in the spotlight after its blockbuster IPO. The company’s analyst quiet period expires this week, allowing Wall Street firms to publish their first research reports. The stock is also set to join the Nasdaq 100, potentially driving additional institutional demand. Traders will also parse the minutes from the Federal Reserve’s June meeting for further clues on how policymakers are weighing inflation and interest rates following Chairman Kevin Warsh’s hawkish debut. Weekly jobless claims and the New York Fed’s consumer inflation expectations survey will provide fresh reads on the U.S. economy. Outside of earnings, the annual Allen & Company Sun Valley Conference will bring together many of the biggest names in technology and media, including executives from Apple, Amazon, Meta, Google, OpenAI, Netflix, Disney, and Warner Bros. Discovery. Meanwhile, the Raise Summit AI conference in Paris will feature leaders from Google, AMD, Broadcom, Anthropic, and OpenAI discussing the next phase of artificial intelligence development.