What we learned last week:
“You can’t go back and change the beginning, but you can start where you are and change the ending” – C.S. Lewis
Oil prices continue to fall, the labor market remains resilient, and AI continues to dominate the headlines.
These three stories came together during the holiday shortened week and pushed major U.S. stock indexes higher, with the tech-heavy Nasdaq leading the way.
Volatility to the upside in oil prices marked the fist half of the year. A memorandum of understanding between U.S. and Iran changed that story and oil prices have fallen below $70 a barrel. Saudi Arabia is moving millions of barrels of oil through the Strait of Hormuz adding supply to the oil market and giving buyers, sellers, and transporters hope for safe passage.
A vital engine of the economy, the labor market, received a check-up last week with reports from several different agencies. The first report investors reviewed was job openings in May, which grew to almost 7.6 million, mainly blue-collar sectors offering the most growth. This growth in job openings was balanced by slower job growth in June.
The BLS reported a tick down in the unemployment rate to 4.2%, due to a decline in the participation rate. A mild 57,000 new payrolls were added in June – with weaker than expected seasonal hiring in leisure and hospitality contributing to the low growth. The June growth is slower than the 129,000 added in May, and below the 115,000 Dow Jones consensus expectation.
The two reports continue the low hire and low fire story the labor market has been telling since the year began.
Of course, a week wouldn’t be completed without an update on AI.
AI chip makers (semiconductor stocks) surged more than 80% in the first half of 2026 but suffered their worst two-day selloff in a month last week. A key concern remains whether AI hyperscalers are overspending on capacity. Adding to those concerns, Meta announced plans to launch a cloud business that will sell excess AI computing capacity. While the move could create a new revenue stream, the phrase “excess compute” reinforces investor worries that the industry may be building more AI infrastructure than it currently needs.
Good news for investors, multiple sectors of the economy have driven stock gains, and the AI-led rally that defined the first half of the year has broadened.
Looking ahead, investors will certainly continue to watch for information related to the direction of AI and oil prices. While there is little economic data for investors to digest this week, the Fed’s June meeting minutes will be released and open for investor interpretation.
What’s ahead this week:
Economic Events
- Meeting minutes from the Fed’s June meeting will be released Wednesday and investors anxiously will comb through it looking for signals of a potential rate hike in the future.
Earnings
- Quite week of earnings, with several companies in the consumer sector reporting
- Apparel company Levi Strauss
- Pepsi
- Delta Airlines
My goal is for you to feel educated and informed about variables we do and don’t have control over and find ourselves working within. I hope to do it in an informative and relatable way. As always, I value your relationship and planning objectives – my door is always open for conversation.
