Wall Street entered the first full week of July focused on interest rates after the Federal Reserve’s recent meeting pushed yields higher and shifted stock momentum. The Dow Jones Industrial Average reached an all‑time high on Thursday and is up 1.3% for the week, while the S&P 500 has risen 1.2% and the Nasdaq Composite 1.6% despite a pullback in chipmakers. The market closed a strong second quarter, with the S&P 500 and Nasdaq posting their biggest quarterly gains since 2020, and the Russell 2000 delivering its best performance in the first half of a year dating back to 1991.
Investors now wonder how much further upside remains as the Fed begins a new era under Chairman Kevin Warsh, who took the helm in late June. The central bank kept rates steady at its latest meeting, despite pressure from President Donald Trump to cut them, and Warsh noted that inflation remains “too high.” CME’s FedWatch tool prices an approximately 80% chance that rates will stay unchanged at the upcoming policy meeting later this month.
“There’s a new sheriff in town,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report. “The markets don’t know how he will lead, so they will be watching the minutes closely.” Those minutes could trigger sharp moves in Treasury yields, with short‑term notes already higher on concerns about inflation linked to the U.S.–Iran conflict. The 2‑year note has risen about 34 basis points over the past three months, and the 10‑year benchmark is up roughly 18 basis points.
Short‑term yields fell on Thursday after weaker‑than‑expected jobs data showed the U.S. added 57,000 jobs in June—about half of the 115,000 economists expected. Stocks initially jumped, giving investors hope the Fed might pause rate hikes, but the S&P 500 and Nasdaq later gave back those gains as semiconductor stocks slipped.
“We achieved close to an average full‑year gain in just six months, raising questions about how much fuel is left in the market this year,” said Chris Kampitsis, managing partner at the SKG Team. He added that stocks could still climb as companies are expected to benefit from strong earnings and productivity gains driven by artificial intelligence.
Wall Street strategists project the S&P 500 will close 2026 around 7,807, about 4% higher than its end‑Q2 level. While earnings season is still approaching, notable reports are slated from PepsiCo on Monday and Delta Air Lines on Friday.
Upcoming Economic Calendar (ET)
- Monday 9:45 a.m.: Services PMI (June final)
- Monday 10:00 a.m.: ISM Services (June)
- Tuesday 8:30 a.m.: International Trade (May)
- Wednesday 10:00 a.m.: Wholesale Trade (May)
- Wednesday 2:00 p.m.: FOMC Minutes
- Wednesday 3:00 p.m.: Consumer Credit (May)
- Thursday 8:30 a.m.: Initial Jobless Claims (week ended July 4)
- Friday: Earnings – PepsiCo
- Friday: Earnings – Delta Air Lines
