Weekly Market Update (Jun 13, 2026)
HIGHLIGHTS
It was a volatile week for the equity market. The ECB started its rate-hiking cycle this week. All eyes are on the Fed meeting for the coming week.
- Central Bank: The ECB started hiking rates. Warsh will chair his first Fed meeting next week, with markets expecting rates to remain on hold. The Bank of Japan is likely to hike, while the Bank of England is likely to hold rates.
- AI CapEx: The AI capital expenditure (CapEx) boom is likely to weigh on the performance of mega-cap tech stocks. Strong demand for chips has also boosted semiconductor companies’ profitability to elevated levels, while investors are becoming skeptical about the durability of those earnings.
- Oil: Spot Brent futures dropped around 25% from their March peak, although flows through Hormuz remain low. The global oil market deficit during the disruption period was smaller than expected. Investors’ holdings have moderated as concerns about escalation in the Iran war and major damage to oil production facilities have eased.
MARKETS
| Nasdaq | 25,888.84 | +0.70% |
| S&P 500 | 7,431.46 | +0.65% |
| Dow | 51,202.26 | +0.66% |
| 10-Year | 4.49% | -4bps |
| Brent | 87.33 | -6.19% |
| DXY | 99.81 | -0.26% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: Strong profitability has been supporting the elevated S&P500 valuation. S&P500 return on equity (ROE) has increased by 150 bps over the past four quarters.
UBS: Investors will be more selective in the AI industry, with a focus on stocks that can offer greater demand visibility, earnings support, and pricing power. We suggest reducing excessive single-stock concentration.
Fixed Income
Morgan Stanley: 10Y yields have hovered around 4.5%, creating a major headwind for improving market breadth, as they are key to valuations and cost of capital considerations. We expect market breadth to improve, but we do not see lower rates as imminent, which remains a necessary catalyst.
UBS: We think markets have gone too far in pricing in rate hikes. Therefore, we see the recent sell-off in the bond market as a buying opportunity to lock in yields. Investors should be cautious when selecting European bonds, as policy is tightening.
Economy
Barclays: Inflation in the US is firmer than it appears. There will be more information about the reaction function and the new Fed chair’s policy direction after next week’s FOMC meeting.
Morgan Stanley: There are factors cushioning the oil shock, including strategic reserve releases, global inventories, and fiscal support. However, we believe oil prices in both spot and futures markets are too optimistic, and the support from these factors may fade.