U.S. equities moved higher last week as investors responded to moderating inflation, resilient economic data, and continued enthusiasm surrounding artificial intelligence and innovation-driven growth. The S&P 500 gained 0.5%, the NASDAQ rose 0.6%, and the Dow added 0.6%, extending the market’s positive momentum. Inflation readings came in better than expected, easing concerns about price pressures and reinforcing confidence in the economy. The labor market remains healthy, corporate earnings continue to exceed expectations, and consumer spending has remained resilient despite higher interest rates and energy costs. Investor sentiment also benefited from the highly anticipated SpaceX IPO, which highlighted strong demand for innovative growth companies. Bond markets rallied as well, with the 10-year U.S. Treasury yield falling 11 basis points to 4.45%. Geopolitical concerns eased following the recently announced U.S.-Iran peace agreement, reducing fears of broader regional conflict and energy market disruptions. While encouraging, we remain somewhat skeptical that the agreement will deliver lasting stability given the region’s long history of setbacks. Even so, solid economic growth, improving inflation trends, strong corporate profits, and continued innovation remain supportive of a constructive long-term outlook for investors willing to stay focused on fundamentals rather than short-term noise, and investors have been rewarded this year with solid returns across all markets (see the YTD returns immediately below).

U.S. & Global Economy

• Last week’s economic data underscores the U.S. economy’s resilience, with inflation data that came in below expectations reinforcing a gradual moderation of price pressures. Though inflation is still above the Federal Reserve’s target, these data points have boosted investor expectations for greater flexibility in future rate cuts. Consumer spending remains solid, supported by strong labor markets and wages, and business investment draws momentum from artificial intelligence, infrastructure, and reshoring. The upcoming FOMC meeting, the first under new leadership, will focus attention on monetary policy, and new Fed Chairman Kevin Warsh will be solidly in the spotlight. While global conditions are mixed, a combination of moderating inflation, steady growth, favorable employment, and innovation continues to provide a constructive outlook.

Policy and Politics

• The geopolitical picture has improved notably over the past week, with signs that a U.S.-Iran peace agreement may be close. Oil prices have pulled back sharply, with U.S. crude trading near $85 a barrel and Brent around $87 after President Trump said a deal was within reach, a significant drop from the crisis highs above $110 reached earlier this year when disruptions in the Strait of Hormuz threatened roughly 20% of global energy supply. While previous ceasefire efforts proved shaky and military tensions persisted into late May, negotiators are now working to finalize an agreement that could reopen the vital shipping route and formally end hostilities. Even so, energy markets may take months to fully normalize, and elevated oil prices remain a risk for inflation, Federal Reserve policy, and the broader economic outlook. For now, investors appear increasingly optimistic that a deal will be reached, but geopolitical risks remain high and the situation could still shift quickly with new developments.

As we move deeper into the summer months, investor focus is shifting. The emphasis now is on the durability of economic growth, the direction of monetary policy, and a complex geopolitical backdrop. Global headlines remain dominated by ongoing conflicts in the Middle East and Ukraine, trade negotiations with China, and broader geopolitical uncertainty. The U.S. economy, however, continues to demonstrate resilience. Inflation trends have improved. Unemployment remains low. Consumer spending has been better than expected. Business investment, especially in artificial intelligence, infrastructure, energy, and manufacturing modernization, continues to fuel economic activity. This week’s Federal Reserve meeting will be closely watched for any change in tone from Chairman Kevin Warsh or his colleagues regarding the path of future interest rates. Meanwhile, investors are assessing the broader implications of SpaceX’s highly successful IPO. This further underscored the strong demand for innovative, growth-oriented businesses. Geopolitical developments and energy prices still require close monitoring. However, healthy economic fundamentals, solid corporate profitability, accelerating innovation, and a constructive consumer backdrop all remain supportive of a positive long-term outlook for investors willing to look beyond daily headlines. Please contact the team at Valley National Financial Advisors for any market-related questions.

Economic Numbers to Watch This Week

• U.S. Empire State Manufacturing Survey for June 2026, prior 19.6
• U.S. Home Builder Confidence Index for June 2026, prior 37
• U.S. Retail Sales for May 2026, prior 0.5%
• U.S. Retail Sales ex-Autos for May 2026, prior 0.7%
• U.S. Pending Home Sales for May 2026, prior 1.4%
• U.S. Business Inventories for April 2026, prior 0.9%
• U.S. FOMC Interest-Rate Decision on June 17, 2026
• U.S. Fed Chairman Warsh Press Conference on June 17, 2026
• U.S. Initial Jobless Claims for Week Ended June 13, 2026, prior 229,000
• U.S. Philadelphia Fed Manufacturing Survey for June 2026, prior -0.4%
• U.S. Leading Economic Index for May 2026, prior 0.1%

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