Weekly Market Update: July 6, 2026

Market Update
Written By Trey Kerns

Week Ending July 2, 2026:

S&P 500: +0.58%
NASDAQ Composite: +0.05%
Dow Jones Industrial Average: +1.37%

Market Takeaway

U.S. equity markets finished the holiday-shortened week ending July 2 mostly higher, with the Dow Jones Industrial Average leading the major indices. The S&P 500 posted a modest gain, the NASDAQ Composite finished nearly flat, and the Dow rose 1.37%.

The week was shaped by a softer jobs report, reduced concerns about near-term Federal Reserve rate hikes, and rotation beneath the surface of the market. The Dow rose more than 1% on July 2 and closed at a record high, while the NASDAQ’s nearly flat weekly result reflected pressure in higher-growth technology and semiconductor-related areas.

The broader takeaway is that market momentum remained positive, but leadership broadened as investors became more selective heading into earnings season. Major U.S. indices remain above their 200-day moving averages, and volatility declined during the week, with the VIX ending at 16.14, down from 18.41 the prior week.

Thematic Drivers of the Week

1. Rotation Under the Surface

What happened:

The Dow led the market higher, while the NASDAQ finished nearly flat. The split reflected a rotation away from some of the higher-growth technology and semiconductor names that had led earlier gains.

The VanEck Semiconductor ETF (SMH) declined 6.28% for the week. Sector performance also showed rotation beneath the surface, with the Financial Select Sector gaining 3.57% while Technology declined 2.60% from June 29 through July 2.

Why it mattered:

Market leadership has been narrow at times this year, with technology, AI-related companies, and semiconductors driving a meaningful portion of earlier gains. Last week’s action suggested investors were not abandoning equities, but they were becoming more selective.

A rotation into financials and away from technology can indicate that investors are taking profits in areas that have already performed well while looking for opportunities in more value-oriented or cyclical parts of the market.

Market reaction:

The Dow’s strength and the NASDAQ’s nearly flat result created a split market. The move suggested that broader equity sentiment remained positive, but investors were reducing exposure to some higher-growth areas and reallocating toward other parts of the market.

2. Labor Market Cooling Lowered Fed Pressure

What happened:

The June employment report showed 57,000 nonfarm payrolls added, while the unemployment rate was 4.2%. Labor force participation fell to 61.5%, and average hourly earnings rose 0.3% to $37.64, up 3.5% year over year.

Prior months were revised lower, with April payrolls revised down to 148,000 and May revised down to 129,000, a combined downward revision of 74,000 jobs.

Why it mattered:

The softer jobs report suggested that labor market momentum is cooling. In the current environment, softer employment data can reduce concerns that the Federal Reserve may need to move quickly with another rate hike.

At the same time, wage growth remains important because it can influence inflation expectations and consumer spending. Investors continue to watch whether the labor market is cooling gradually or weakening more materially.

Market reaction:

Markets responded positively overall, with the Dow leading the major indices and the VIX declining during the week. The softer jobs data helped reduce some near-term rate-hike concerns, but market leadership was not evenly distributed.

3. Economic Data Was Mixed but Generally Supportive

What happened:

Several economic reports were released during the week. JOLTS job openings remained firm at 7.6 million, ISM Manufacturing PMI came in at 53.3, and Consumer Confidence improved modestly to 91.2.

The ISM Manufacturing report showed manufacturing remained in expansion, though at a slower pace than May. The index declined from 54.0 to 53.3, while New Orders came in at 56.0, Production at 52.2, Prices at 73.0, Employment at 49.7, Supplier Deliveries at 57.4, and Inventories at 51.4.

Why it mattered:

The data pointed to an economy that is still expanding, but with signs of moderation. Job openings remained steady, manufacturing stayed in expansion, and consumer confidence improved slightly. However, the employment report showed softer payroll growth, and the Consumer Confidence report showed that the percentage of consumers saying jobs were “hard to get” rose to 22.5%, the highest level since January 2021.

That mix gave investors a more balanced picture: economic activity remains present, but labor market momentum appears to be cooling.

Market reaction:

Markets generally viewed the data as supportive, particularly because softer employment data reduced some near-term Fed rate-hike concerns. At the same time, the mixed nature of the reports kept investors focused on whether the economy is cooling in an orderly way.

Earnings Recap: Key Companies in Focus

AeroVironment (AVAV) – Reported June 29

Results:

  • Estimated EPS: $1.47

  • Actual EPS: $1.84

  • Result: Beat by 25.01%

Takeaway:

AeroVironment’s results came in ahead of expectations, and the stock increased 37.33% from June 29 through the July 2 week close. The market reaction suggested investors viewed the results positively, particularly in relation to defense and unmanned systems demand. While one company’s results should not be viewed as a broad economic indicator on their own, the report provided a useful data point for that sector.

Nike (NKE) – Reported June 30

Results:

  • Estimated EPS: $0.13

  • Actual EPS: $0.20

  • Result: Beat by 53.43%

Takeaway:

Nike’s results came in ahead of expectations, with the stock increasing 7.41% from June 30 through the July 2 week close. The market reaction suggested investors viewed the results as a constructive data point for branded consumer goods demand, though broader consumer spending trends should be evaluated using multiple economic and company-specific indicators..

Constellation Brands (STZ) – Reported July 1

Results:

  • Estimated EPS: $3.20

  • Actual EPS: $3.43

  • Result: Beat by 7.13%

Takeaway:

Constellation Brands reported earnings above expectations. The results indicate continued strength in beverage demand and pricing power, suggesting that consumers are maintaining spending in staple and premium categories, which can support steady revenue growth even in a moderating economic environment.

General Mills (GIS) – Reported July 1

Results:

  • Estimated EPS: $0.80

  • Actual EPS: $0.95

  • Result: Beat by 19.21%

Takeaway:

General Mills reported earnings ahead of expectations. The results highlight stable demand for essential food products and the company’s ability to manage input costs, suggesting that consumer staples remain resilient and that households continue to prioritize essential spending even as economic conditions evolve.

Major Economic Reports Recap

June Employment Report

The June employment report showed:

  • Nonfarm payrolls: +57,000

  • Unemployment rate: 4.2%

  • Labor force participation: 61.5%

  • Average hourly earnings: +0.3% to $37.64

  • Year-over-year wage growth: +3.5%

  • April payroll revision: +148,000

  • May payroll revision: +129,000

  • Combined revision: -74,000 jobs

Economic Takeaway:

The June employment report showed labor market cooling. Softer payroll growth helped reduce concerns about near-term Fed rate hikes, while wage growth remained an important inflation-related data point.

JOLTS Job Openings

The May JOLTS report showed:

  • Job openings: 7.6 million

  • Hires: 5.2 million

  • Separations: 5.1 million

  • Quits: 3.1 million

  • Layoffs and discharges: 1.7 million

Economic Takeaway:

Job openings remained firm, suggesting labor demand has not weakened sharply. However, the softer employment report later in the week gave investors a more cautious read on labor market momentum.

ISM Manufacturing PMI

The June ISM Manufacturing PMI came in at 53.3, down from 54.0 in May.

Key components included:

  • New Orders: 56.0

  • Production: 52.2

  • Prices: 73.0

  • Employment: 49.7

  • Supplier Deliveries: 57.4

  • Inventories: 51.4

Economic Takeaway:

Manufacturing remained in expansion, but at a slower pace. The report showed continued economic activity, though the employment component remained below 50.

Consumer Confidence

Consumer Confidence rose to 91.2, up 0.6 points from a revised 90.6 in May.

The Present Situation Index declined to 116.4, while the Expectations Index rose to 74.4. The percentage of consumers saying jobs were “hard to get” rose to 22.5%, the highest level since January 2021.

Economic Takeaway:

Consumer confidence improved modestly, but the labor market details showed some caution beneath the surface. That reinforced the broader theme of an economy that remains active but is showing signs of cooling.

Technical Perspective

  • Major U.S. indices remain above their 200-day moving averages

  • The S&P 500 gained 0.58%

  • The NASDAQ Composite gained 0.05%

  • The Dow Jones Industrial Average gained 1.37%

  • The Dow rose more than 1% on July 2 and closed at a record high

  • The VIX ended the week at 16.14, down from 18.41 the prior week

  • The VanEck Semiconductor ETF (SMH) declined 6.28%

  • Financials led sector performance, while Technology lagged

Interpretation:

From a technical standpoint, the broader market remains above longer-term moving averages. The decline in volatility and the Dow’s strong performance suggest market momentum remained positive, but the weakness in semiconductors and technology shows that leadership is becoming more selective.

Key Takeaways for Investors

  • Markets finished the holiday-shortened week mostly higher

  • The Dow led the major indices and closed at a record high on July 2

  • The NASDAQ was nearly flat as technology and semiconductors came under pressure

  • The June employment report showed softer payroll growth

  • Softer jobs data reduced concerns about near-term Fed rate hikes

  • Financials outperformed while Technology lagged

  • The VIX declined to 16.14

  • Major U.S. indices remain above their 200-day moving averages

Looking Ahead

Investors will be watching a relatively light but important economic calendar in the week ahead.

Key areas of focus include:

  • ISM Services PMI

  • FOMC meeting release

  • Consumer Credit

  • Existing Home Sales

  • Earnings from consumer staples, apparel, and travel companies

Earnings to Watch This Week

Levi Strauss (LEVI) – July 8

Levi Strauss is expected to report earnings after the close on Wednesday. Investors will be watching for updates tied to apparel demand and consumer spending behavior.

PepsiCo (PEP) – July 9

PepsiCo is expected to report earnings before the open on Thursday. The company is a major consumer-staples read-through and may provide insight into packaged food, beverages, pricing power, margins, and consumer trade-down behavior.

Delta Air Lines (DAL) – July 10

Delta Air Lines is expected to report earnings before the open on Friday. Investors will be watching for commentary on premium travel, business travel, fuel costs, international demand, and whether consumers are still spending on services.

Economic Data to Watch

ISM Services PMI – July 6

ISM Services PMI is scheduled for release on July 6. The prior reading was listed at 54.5. This report is one of the better high-frequency reads on the services economy.

FOMC Meeting Release – July 8

The FOMC meeting release is scheduled for July 8. Investors will be looking for additional detail on the Federal Reserve’s view of inflation, labor market cooling, and future rate policy.

Consumer Credit – July 8

Consumer Credit is scheduled for release on July 8. The prior reading was listed at $20.7 billion. This report helps show whether consumers are still borrowing and spending or showing signs of stress.

Existing Home Sales – July 9

Existing Home Sales is scheduled for release on July 9. The prior reading was listed at 4.17 million. This report provides a read on housing activity, affordability, mortgage-rate pressure, and consumer confidence.

Closing Thought

Markets finished the shortened week mostly higher, but the leadership beneath the surface continued to shift.

Softer labor market data reduced some near-term rate concerns, while rotation away from technology and semiconductors showed that investors are becoming more selective. Periods like this are a reminder that headline index returns do not always tell the full story, especially when leadership is changing beneath the surface.

Sources

Disclosure: This market update is for informational and educational purposes only and should not be considered investment advice or a recommendation to buy or sell any security. Market data and company results are subject to revision and interpretation. Past performance does not guarantee future results. Investing involves risk, including the potential loss of principal.

Trey Kerns https://KernsLegacyPlanning.com
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Weekly Market Update: June 29, 2026