U.S. stocks finished last week with a familiar split. The S&P 500 gained 1.2% and the Nasdaq rose 1.7%, helped by renewed enthusiasm for semiconductors and artificial intelligence. The Dow slipped 0.5%.
Monday then erased part of that progress as oil surged and technology shares retreated, with the S&P 500 falling 0.8% and the Nasdaq losing 1.6%. Tuesday’s softer inflation data and strong bank earnings brought buyers back into the market by midday. Risk appetite remains alive, though its attention span has shortened.
The June Consumer Price Index fell 0.4% from May, the largest monthly decline since April 2020, while the annual rate eased from 4.2% to 3.5%. Core inflation was flat for the month and slowed to 2.6% year over year. Energy prices supplied most of the relief, falling 5.7%, including a 9.7% drop in gasoline.
That counts as genuine progress, though June benefited from a temporary retreat in fuel costs. With crude prices climbing again in July, the next inflation report faces a tougher energy backdrop. One clean month changed the tone around rates. It left the broader inflation debate open.
Renewed U.S.-Iran hostilities pushed U.S. crude 9.4% higher on Monday, settling at $78.14 a barrel, while Brent rose 9.6% to $83.30. The move followed fresh disruptions around the Strait of Hormuz, a critical route for global energy shipments. Oil continued higher Tuesday as attacks resumed.
Equities treated the move as a geopolitical scare rather than a full economic break. Even so, the route from higher crude prices to transportation costs, inflation expectations, and bond yields remains short. June’s CPI offered relief from an earlier decline in gasoline.
The Fed Wants More Than One Clean Print
The Federal Reserve’s June meeting minutes showed officials confronting higher energy costs, tariff effects, and price pressure linked to the AI investment boom. Staff raised the inflation outlook, expected core inflation to change little through the rest of 2026, and viewed inflation risks as tilted upward.
In his first congressional testimony as Fed chair, Kevin Warsh said persistently elevated inflation remains unacceptable and highlighted a stable labor market alongside rapid AI-related business investment. The Fed held its policy range at 3.5% to 3.75% in June. Tuesday’s CPI reduced immediate pressure for another increase, yet policymakers still appear willing to wait for a pattern rather than celebrate a single print.
Big banks opened earnings season with results that looked less like caution and more like a capital-markets reunion. JPMorgan, Bank of America, Goldman Sachs, Citigroup, and Wells Fargo benefited from heavy trading, stronger deal activity, and a burst of major equity offerings. Citigroup’s second-quarter profit rose 45%, while global investment-banking revenue reached $61.4 billion during the first half, up 24% from a year earlier.
The results suggest corporations still have access to capital and investors still have an appetite for risk. Bank executives also pointed to elevated valuations, geopolitical tension, and sticky inflation.
The expanded World Cup has reached a familiar-looking final four. France faces Spain on Tuesday, followed by England against Argentina on Wednesday, with the winners advancing to the July 19 final.
After weeks of travel, group-stage math, and a 48-team field, the tournament’s final stretch belongs to four established powers. The trophy stays in North America for five more days. Every remaining contender arrived from somewhere else.