Last Week
Technology and energy stocks rallied while other securities treaded water after President Trump declared the Iran ceasefire over, SK Hynix soared in the largest-ever foreign IPO, and PepsiCo’s second quarter results highlighted softer U.S. consumer demand.
Middle East tensions escalated as the stalemate in peace negotiations lingered, and Iran remained unwilling to relinquish control of the Strait of Hormuz. President Trump announced new sanctions on Tehran, and both sides exchanged a modest level of attacks. The muted market reaction to this ongoing war suggests that investors believe a compromise is in the cards. We hope that optimism proves warranted.
GLPs and high gas prices took a toll on PepsiCo’s second-quarter earnings, painting a softer picture of the U.S. consumer, but resilient overseas snack demand helped the company beat revenue estimates and match the consensus earnings forecast.
Tech stocks remained the craze as SK Hynix, the South Korean semiconductor giant, enjoyed a wildly successful IPO on Friday with its shares jumping 13.6%. The Company raised over $26 billion, which was the largest first-time listing ever by a foreign company. For all the talk of AI becoming crowded, investor appetite for anything tied to the semiconductor ecosystem remains strong.
The Nasdaq Composite jumped 1.7%, and the S&P 500 climbed 1.2% with nice moves by Meta and Nvidia providing a lift. In fact, most of the strength came from the Tech sector which posted a 3.4% gain, while the Oil & Gas sector also climbed over 3%. Overall, declining issues outnumbered advancing issues by a factor of 5-4, and the Russell 2000 slipped 0.6%. Despite this, small-cap stocks continue to outperform other market capitalizations in 2026. As CIO Eric Kuby recently mentioned to CNBC, “Action-starved traders are seeking small-cap stocks for the next big move,” as investors look for opportunities beyond the market’s traditional leaders.
The yield on the 10-Year Treasury moved 8 basis points higher to 4.57%, reaching the upper band of its trading range over the last five years. The Dollar and Gold were flat, while Crude Oil bounced back over $70 per barrel.
Our Chicago Sports Teams also treaded water last week as we reached the MLB All-Star Week break. In the NBA summer league, Caleb Wilson gave Bulls fans reason to get excited with a 35-point outburst in his debut. The 6’10 teenager has got game!
This Week
The war rhetoric intensified over the weekend with multiple exchanges of missile strikes between the U.S. and Iran. Additionally, President Trump said on Monday morning that the “U.S. will keep the Strait” and “probably run it” during his interview on Fox News. He also said the U.S. should be reimbursed for securing the waterway, proposing a 20% charge on shippers.
Second-quarter earnings results, inflation data, Fed-speak, and the war will drive the financial markets.
Bank earnings will kick off earnings season with JPMorgan Chase, Goldman Sachs, Bank of America, Citigroup, and Wells Fargo all reporting on Tuesday. Technology companies follow with Taiwan Semiconductor and Netflix, both reporting on Thursday.
Inflation data will be in focus with Tuesday’s Consumer Price Index report and Wednesday’s Producer Price Index. Fed Chairman Kevin Warsh delivers his semiannual monetary policy testimony before Congress on Tuesday and Wednesday. Warsh has done a nice job thus far of walking the tightrope between price stability/labor market conditions.
Give peace a chance? Another week of bellicose statements with a sprinkling of “let’s make a deal” overtures is likely.
The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvest.com.