Equity Overview

The broader market struggled in June, weighed down by rising inflation data, a hawkish shift from the Federal Reserve, and continued uncertainty around the Iran conflict.  Six of eleven sectors in the S&P 500 rose in June, with industrials the best sector and communication services the weakest.  Notwithstanding the dramatic performance of the memory subsector, growth stocks generally underperformed value.  Volatility was noteworthy, as the S&P 500 moved more than 1% on 8 of 21 trading days.

Despite the monthly setback for the broader market, the quarter was outstanding as the S&P 500 rose 14.9% and the Nasdaq Composite surged 21.4%–their best quarterly performances since 2020.  And those results were dwarfed by the Philadelphia Semiconductor Index which had its best quarter ever, up 87.8%.

Macro Overview

June presented investors with a challenging combination of strong corporate earnings and increasingly difficult macroeconomic conditions. May CPI came in at 4.2% year-over-year, the hottest reading since early in the Iran conflict.  Core PCE inflation was revised upward to 3.3% for 2026 in the Fed’s latest projections, well above its 2% target and above levels seen at the start of the year.

The new Fed Chairman Kevin Warsh led his first Open Market Committee meeting on June 16–17, and it marked a sea change from the Powell years.  Warsh scrapped the Fed’s traditional forward guidance entirely and announced five working groups to review communications, balance sheet policy, data methodology, and the inflation framework — a substantial overhaul signaling a more data-dependent and less predictable approach to policy.  While the Fed held rates steady at 3.50–3.75%, it delivered a starkly more hawkish message than markets expected. Nine of 18 committee members projected a rate hike in 2026, up from zero at the prior meeting. Following the meeting, futures markets reflected a 49% probability of a rate hike by September.

Progress on U.S.-Iran peace talks in Doha, while fragile and incomplete, pushed oil prices lower with the benchmark WTI settling near $69.50 per barrel by month-end.  This represented a further decline from May’s close near $91 and approached pre-conflict levels. Gold fell to approximately $4,026 per ounce, its lowest level since September 2025, reflecting higher real yields and a somewhat reduced safe-haven bid as geopolitical risks eased.